Real Estate Question

Enfuego · May 31, 2013

If you are clueless about real estate and have no idea about homes, please don't waste the effort.

I've owned a home in N.C. for about 11 years now. I actually lived in it for three years then we've rented it out ever since that time. We paid 160K for it and owe 120K. It's roughly 1,850 square feet, 3BR, 2.5 bath, has a large bonus room and an unfinished attic. It's sitting on 0.62 acres.

Our current tenant just gave 30 days notice which was expected. Do we...

A) Have the house power washed, replace the roof (it needs it), paint the shutters, put down new carpet and paint the entire inside and rent it out again or...

B) Replace the roof, power wash it, paint the shutters, replace the carpet, pain the inside, put in granite and kitchen tile and sell it?

If we rent it out, we'll ask for roughly $100-200 more a month after several improvements and if we sell we're looking at listing at roughly 185K.

Thoughts?

loomis41973 · May 31, 2013

Where in NC? I know a bit about real estate there.

Enfuego · May 31, 2013

loomis41973 said:
Where in NC? I know a bit about real estate there.

Goldsboro. Thanks for your help Loomis.

Defying · May 31, 2013

location aka the local market will determine the answer to question...

GL

loomis41973 · May 31, 2013

I would likely do the minimum and rent it out again unless i needed the cash.
Make sure to get many bids on the repairs and upgrades.

Always nice to have a chunk of change sitting there if need be.

Enfuego · May 31, 2013

loomis41973 said:
I would likely do the minimum and rent it out again unless i needed the cash.
Make sure to get many bids on the repairs and upgrades.

Always nice to have a chunk of change sitting there if need be.

Don't need the cash Loomis. Why is this your opinion?

groundhog11 · May 31, 2013

i used to live about 30 miles from there....rent it out.

Enfuego · May 31, 2013

ground hog11 said:
i used to live about 30 miles from there....rent it out.

Why do you say that?

Albatross · May 31, 2013

Rough estimates by not seeing:

5k for roof
2500 for paint
2500 for carpet
3k for granite
1500 for tile
200 for wash

Enfuego · May 31, 2013

Albatross said:
Rough estimates by not seeing:

5k for roof
2500 for paint
2500 for carpet
3k for granite
1500 for tile
200 for wash

Exactly correct figures. We already have some estimates.

Albatross · May 31, 2013

Also the main thing......look to see what homes are seeing for in the neighborhood. The surrounding comps and new construction sale prices. A resale in markets compared to new construction needs some extras or either a a discount in price. I build new homes and flip existing homes. Selling both like hot-cakes right now. Our market analysis is showing a strong market for selling the next 16 months and then another mild recession in the housing. Take that for what's its worth.

groundhog11 · May 31, 2013

because you have doing well there. what is your profit per month? if not very high , then i would sell it.

Enfuego · May 31, 2013

ground hog11 said:
because you have doing well there. what is your profit per month? if not very high , then i would sell it.

We break even but only have 14 years left because we refinanced down. If we made these repairs and asked for more, we'd make around $150 a month if that.

Enfuego · May 31, 2013

Albatross said:
Also the main thing......look to see what homes are seeing for in the neighborhood. The surrounding comps and new construction sale prices. A resale in markets compared to new construction needs some extras or either a a discount in price. I build new homes and flip existing homes. Selling both like hot-cakes right now. Our market analysis is showing a strong market for selling the next 16 months and then another mild recession in the housing. Take that for what's its worth.

Comps are 180-190K.

loomis41973 · May 31, 2013

Enfuego said:
Don't need the cash Loomis. Why is this your opinion?

Why not hold onto it? So long as you have decent renters who pay on time and don't tear the joint up it's almost always going to go up in value

Albatross · May 31, 2013

Not really sure about the market there, but granite is a must for a resale. Not as much importance on the flooring at this point. Go with a cheap Santa Celia for the tops, that's what is in right now. I would make the improvements except the tile and see what happens for a couple months if you can swing it. Keep in mind that you will have to make some improvements once it goes under contract and those cock roach home inspectors make their list. If it was in the metro atlanta area I would help you out. Good luck.

Enfuego · May 31, 2013

loomis41973 said:
Why not hold onto it? So long as you have decent renters who pay on time and don't tear the joint up it's almost always going to go up in value

You make a good point.

seanjohn007 · May 31, 2013

unless you need money hold on to. im a beverly hills real estate agent so i know nothing about your market or area. with that said all of the numbers i have seen on a national and local scale show that its a great time to buy and hold, especially if your making money on it. big time investors have moved into la with a 5 year plan (renting it out now and will sell in 5 years).

you should talk to a real estate agent though to find out specifics. an option could be to put it on the market to sell and lease. see who comes to you, and what numbers they are coming in at.

Enfuego · May 31, 2013

seanjohn007 said:
unless you need money hold on to. im a beverly hills real estate agent so i know nothing about your market or area. with that said all of the numbers i have seen on a national and local scale show that its a great time to buy and hold, especially if your making money on it. big time investors have moved into la with a 5 year plan (renting it out now and will sell in 5 years).

you should talk to a real estate agent though to find out specifics. an option could be to put it on the market to sell and lease. see who comes to you, and what numbers they are coming in at.

Good advice. We don't need the money at all.

Going to call the agent tomorrow just to get educated on the market since we haven't lived there in years.

ProPokerPlayer · May 31, 2013

I dont know anything about the selling end of it but if all the rental market will bear is a $150 a month profit ($1800 yr.) thats a really poor investment. Your about 1 A/C Compressor and and a sewer back up from losing money. Plus your talking about putting $15K into it, that'll take you over 10 years just to get that back. You can make $25K on a sale right now with no future worries should be pretty tempting. If your really wanting to stay in the rental business sell it and get something you can actually make a few coins with...

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