| Getting Rid of Real Estate |
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jamescarr
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| Getting Rid of Real Estate |
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Most of the time I keep hearing of people who are trying to get rid of their real estate because they no longer can afford their mortgage. My spouse and I however have a different dilemma.
Both of us purchased homes after we landed our first jobs fresh out of college. These were new construction "starter homes" with your typical 3 bedroom/two baths. However since we married and are raising our family it's time for a bigger house. Plus neither house is in a good school district (it is the last thing you think of fresh out of college).
Currently one of the houses is a rental property, but the more I think about it the more I think it wouldn't be wise to have both be rentals and buy a new house for the sole reason that if we lose tenants it will be a large financial burden. The market hasn't been to good either and both neighborhoods have houses that have been on the market for 1 to 2 years.
What our the options in this situation? Rentals sound good as they have a potential to turn into revenue streams after 5 to 10 years but at this point in time 3 mortgages feel DAMN risky! 
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Tue Dec 06, 2011 11:30 pm |
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oldguy
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quote:
Rentals sound good as they have a potential to turn into revenue streams after 5 to 10 years but at this point in time 3 mortgages feel DAMN risky!
Yes, it's a risk - probably all real estate owners have been there. We once had 4 houses with 6 mortgages for a few years - and it worked out fine, they all at least doubled in value, one did 6X. We owned those houses for another 20 yrs, wtill own two fo them.
It's a personal decision. The Law of Investing - risk and return are directly proportional. So you must select your own risk level, based on your wealth building plan. The two appreciating assets are stocks and real estate - and the two provide a good diversification.
Stocks historically have about an 11%/yr longterm return. Rentals often do a bit better than that as long as you keep it leveraged. After 5 to 10 yr years, the 2 rents may pay all 3 loans - and that gives you the opportunity to pile income stream into stocks, maybe max the 401k's and build a good taxable stock fund (that doubles as an EF).
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Wed Dec 07, 2011 2:51 am |
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oldguy
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I should have mentioned - my best rentals have been 3/2's, about 1100 sq ft to 1250 sq ft, they seem to rent better and sell better, they form the base for the market, when people get forced out of big houses they default to small houses.
I like to buy near-new houses, 2 to 9 years. The first owner hung the drapes and planted the grass. The houses have modern plumbing, modern electrical service, near-new water heater, AC, furnace, dishwasher, disposal, shingles,carpet, flooring - no upgrades needed for a few yrs.
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Wed Dec 07, 2011 2:58 am |
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maratlerner
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Location: Brooklyn NY
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A good option is to consider a Deed in Lieu. This will forfeit the property to the bank without going through any foreclosure or sales process.
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Wed Dec 07, 2011 5:02 pm |
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Bibika
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I like oldguy's comment, sounds very well planned, but i understand your concern also. The financial world says we have another big financial crises coming along.
See if your two houses have a good chance on the market to be rented for longer time period and cover some of your monthly expenses. I think that real estate agents can actually help you with this estimation a lot. They have a direct contact with the clients - people looking for a house to rent. So they will be able to tell how much you can get as rent and how big is the possibility to find and keep tenants.
I hope this helps,
Bibika
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Thu Dec 22, 2011 11:41 am |
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Offshore-Wealth.com
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| Re: Getting Rid of Real Estate |
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quote:
Originally posted by jamescarr
Most of the time I keep hearing of people who are trying to get rid of their real estate because they no longer can afford their mortgage. My spouse and I however have a different dilemma.
Both of us purchased homes after we landed our first jobs fresh out of college. These were new construction "starter homes" with your typical 3 bedroom/two baths. However since we married and are raising our family it's time for a bigger house. Plus neither house is in a good school district (it is the last thing you think of fresh out of college).
Currently one of the houses is a rental property, but the more I think about it the more I think it wouldn't be wise to have both be rentals and buy a new house for the sole reason that if we lose tenants it will be a large financial burden. The market hasn't been to good either and both neighborhoods have houses that have been on the market for 1 to 2 years.
What our the options in this situation? Rentals sound good as they have a potential to turn into revenue streams after 5 to 10 years but at this point in time 3 mortgages feel DAMN risky!
Since you have newer homes, renting is potentially the best option, and if you can cover your expenses, and hopefully see a positive cashflow depending on market area rental rates and availability, you have to check market out first before you decide. If you have not found buyers in 1 to 2 years, as is typical in the housing collapse we are in, you have a lot to decide.
Good luck,
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http://ENVIROPURELIGHT.com
http://FREE100KSECRET.com
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Thu Dec 22, 2011 10:05 pm |
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kyleadam
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Try to create a warm and homely atmosphere by suitably renting or hiring furniture. Remember that staged houses usually sell much quickly at a high price.I could talk forever about who should be delegated to do what, who should have what responsibilities, and very importantly, who puts in money and when.
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Sat Apr 14, 2012 1:12 pm |
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jamesmadan
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Location: miami
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A good option is to consider a deed in lieu. This will lose the property to the bank without going through any foreclosure or sale process.
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Sun Apr 15, 2012 1:06 pm |
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wosnky
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Thanks for sharing this information. I really like your way of expressing the opinions and sharing the information. It is good to move as chance bring new things in life, paves the way for advancement, etc. But it is well known to everyone that moving to new location with bulk of goods is not an easy task to move or shift from one place to other place because I have experienced about that and I face the problem like that. There I go to village near to my city faced that problem there.
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Thu May 31, 2012 2:17 am |
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Danny2012
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Location: SA
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I need to agree - renting the properties out is a good idea. Keep in mind that these two properties will have a positive value growth over years, which you can sell one day and use the money for either study fees for the children, or for retirement purposes.
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Mon Jun 04, 2012 2:25 pm |
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ojha.james
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Location: UK
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Thanks for this information which is superb for those who wanna rent a property soon...
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Thu Jun 14, 2012 10:06 am |
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willsondany
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To avoid hiring real estate agents you can have a glance at many real estate portals which provide details about the availability of lands in various cities and their localities. 99acres.com, property.sulekha.com, indiaproperty.com these sites and many more have a lot of properties listed by cities and their localities.
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Fri Aug 03, 2012 6:46 am |
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kennygrint
New Member
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Joined: 09 Aug 2012
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3 Mortgage? are you sure you want to bury yourself on all of these payments? this situation would be very risky for your financial situation.
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Thu Aug 09, 2012 9:47 am |
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ericammcoy
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Paying 3 mortgages at the same time would be really difficult unless you and your wife have a very good salary. If you are planning new home you can sell your old house or you can rent it out but make sure that the renters are person you can really trust and won't give you a hard time on the payment for rent.
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Sat Aug 11, 2012 5:43 am |
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robinson1983
Member
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Location: New York,New York
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Mortgage really is awful,isn't it.Thus,I think you need to consult experts like Ed Butowsky for better plans rather than renting it considering the cost of Mortgage.
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Tue Aug 28, 2012 8:41 am |
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