Posted on 03/02/2024 4:15:16 AM PST by where's_the_Outrage?
Dear Big Move, I’m struggling with the idea of selling a rental property that has both a high monthly maintenance fee and a high mortgage rate. The costs to keep this house are currently higher than the monthly income it generates.
I recently refinanced in order to pull out $100,000, so now I owe $420,000 on the property, which is worth approximately $750,000.
My recent refinancing increased my mortgage rate from 5.14% to 7.9%, essentially eating up all my cash flow.
I’m on the fence. Should I sell, or should I refinance for a better rate to free up cash flow?
Losing Money Fast
Dear Losing,
The fact that you’re bleeding money from this rental is not good. You need to either bring down your interest rate or raise rents so you can turn a profit in order to make it a worthwhile investment. But keep in mind that many people are sitting on the sidelines waiting for interest rates to fall, so you might not get your desired price if you decide to sell.
(Excerpt) Read more at msn.com ...
Could be an old home too. I personally bucket the HOA fees separate from maintenance unless its the rare one-time HOA fee for a specific project. If using it at as Airbnb and/or VRBO rental, would certainly increase the maintenance vs a long-term tenant.
We started our business in ‘78 during the Carter years, when interest rates were up to 14%. instead of borrowing from a bank our supplier sold up equipment on time. We got a very good contact that actually paid on the agreed time so we could pay off our equipment way ahead of time. During this time the banks wouldn’t loan us money on accounts receivable. After we made several large deposits to our account the banker asked us for a meeting where he pitched us on borrowing money to build our credit. We never did and built our credit by paying for our supplies when we got them.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.