aj845,So if you rent, are you going to rent it for a maximum of 3 years? Ideally, rent it for 1 to 2 years and then sell. The property has been sitting on the market since october, which is a long time and it's harder to sell now. It was sale pending for about half the time, but unfortunately the property prices went down in the meantime.I just met with a property manager today at the townhome to discuss renting after the 5th. We were interrupted by one agent with some potential buyers. There was a big stack of realtor cards in the kitchen. People are definitely visiting.Or are you going to rent it out until the housing values recover? That's the big question, which is why I am asking this in the tax forum. If I rent past september 2013 it changes the equation very significantly.Most likely, I would start with 1 year lease with a tenant, then go month to month after that. And if market conditions, improve, kick the tenant out and sell. If not, continue to rent it out.Because if you are going to try to hang on until housing values recover, you probably need to refinance it pretty soon into a fixed rate mortgage, since you are uncomfortable keeping the HELOC for more than 3 years.Well, if rates aren't going anywhere I'm fine keeping the HELOC. I just fear that they will be higher in 3 years.If you are going to do this, you should then refigure your cash flow with a fully amortizing 30 year payment with an investment property rate.At 5.625% fixed rate on investment property, with principal payment included, the loan payment would be $1439. Monthly cash flow would be about $500 negative with today's rents.
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