Well, we still can't sell the second house and it's costing us about $3350 a month. The best we can do is rent it for about $1650 in the local market.
But doing so would mean we have to take it off the market for a year - guaranteeing about a $1650 loss each month.
With our current circumstances - I'm a bit nervous about my career at Big Company - it would help us reach cash flow bouyancy, however, if I lost my job it would still leave a painful expense.
I'm going to discuss with my realtor what we can do. As the house has been on the market for more than a year and there is no substantial improvement in the market, I'm leaning toward renting it out.
What would you do?
Regards,
makingourway
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3 comments:
Ouch! That is not good. I would be bankrupt if I were bleeding cash like this. I am surprised the home rent rate is only $1.6k on a $400k+ house. If you can't rent it for more than $1.6k its certainly not worth what you paid for it now. What about reducing asking price? Or selling Chicago house? You are spending more to maintain that home than probably the average income in US.
How about refinancing? From a cash flow perspective you can't be saving much - $3k/mo on second house + $Xk/mo on 1st house + remaining expenses.
I think I would rent it out. Next year is looking more promising for a sale.
I would find a quality rental agency to tend to the details. They would take a portion of the rent. Although, with your location issues, this would be well worth the cost. These folks will pound on the door when the rent is late and make sure the folks have good credit before putting them in. Not to mention check on the property regularly.
Also - maybe the possibility of rent-to-own situation. In that place, you could very well receive more -
Keep your options open.
Thanks for the comments.
Unfortunately, I'm not saving much right now - a fraction of what I was saving earlier.
Basically 529 and 401k. I've also accelerated payments on our HELOC.
I've decided to rent the house out and see if I can sell it - whichever happens first.
I'll use a reputable agency to rent the house out and have them manage it.
I may also reduce the price to see if it moves the house faster.
The community in which the house is located is experiencing very slow sales volume - the only thing that moves are the less expensive houses.
I'm more or less stuck long term.
There is very little correlation between the rental price of the house and the actual market value. In other words, the rental market is composed on consumers who could not afford a $400k+ house. Unfortunately, the tighter underwriting standards dramatically reduce the pool of available buyers in that geography.
I'd like to avoid selling the Chicago house - we're planning to live in it for the next 7-10 years or longer if possible.
The suburb we live in is very nice with excellent schooling options.
If things go very bad, the Chicago house may have to go, but we'll see what happens.
Right now, i'd like to dispose of the NC house. once that's done we'll be saving more and in much better circumstances.
Until then we continue to look for ways to save money.
Regards,
makingourway
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