I currently own a townhouse in the Los Angeles area and need to relocate to another city due to a job. Since home prices are going down, I thought it would make sense to rent my property rather than sell it and not get my money's worth. I hired a property manager and she is supposed to be finding me a tenant. She asked me if I was interested in leasing with an option to buy and I told her I would think about it. Now she is suggesting that I sell because prices are only going to continue to go down and I will only make $200/month profit by renting when I could get $150,000 profit by selling and then reinvesting in more rental property. I'm confused.
2006-10-30 16:54:25 · 5 answers · asked by Justina 3 in Business & Finance ➔ Renting & Real Estate
Hang on to the townhouse....especially if you have a good loan.
Prices will eventually rebound + you'll have your Prop. 13 advantage.
Sell only if you REALLY need the money now.
2006-10-30 17:00:10 · answer #1 · answered by feanor 7 · 0⤊ 0⤋
Hi,
I am a Realtor in L.A. and I can understand your concern. Seems that you have everything working to your advantage. First, you have a large equity in you home. Second, you could get a positive cashflow from renting out your townhome. Most of the houses that I sell are in the San Fernando Valley and I have also worked in Beverly Hills, Westwood and Brentwood areas. In the Valley, prices for real estate have dropped very slightly.
Now, going back to your question. It all depends on where you are moving to.If are going to Texas or some other state where the real estate market is not as crazy as in L.A., you may want to sell and buy a multi-residential building. Here is why...Suppose you rented out your townhome and some time later your tenant moved out. What would be your vacancy rate? 100%, right?
What if you bought a 4 unit property and a tenant moved out? What would be the vacancy rate now? It's 25%. You would still have three tenants paying your mortgage and taxes. Can you see how it would be better for you? However, you would need to do some research and find out about the area you are moving to. You can go to www.realtor.com and check out multi-residential properties in the new area. If the above scenario does not work, it would still be a good idea to sell and buy something closer to your new home . That way you would be close to your property and tenants in case something happens. If you have any further questions, you can e-mail me: lucky7usa2005@yahoo.com
2006-10-30 17:32:22 · answer #2 · answered by Anonymous · 1⤊ 0⤋
Sell it. Invest $125,000 in a high interest rate account. And make at least $500 dollars a month. Take the other $24,990 to make the move and rent at your new location. Take $10.00 and pay pal it to me just for fun. : ) Or just give me ten points.
2006-10-30 18:38:34 · answer #3 · answered by Speedy 8 2 · 0⤊ 1⤋
Sell Heck take 100k that is not a bad days work. If you get greedy you may lose it all.
Sell and this is why.
http://www.breakingbubble.com/index.htm
2006-10-30 17:12:35 · answer #4 · answered by Anonymous · 0⤊ 1⤋
been there done that JUST SELL and get away from it all..
2006-10-30 16:57:20 · answer #5 · answered by mamaw102 1 · 0⤊ 1⤋