Rent our townhome and R2i???

[SamayDubey]

i am planning to rent out our town home thru a property management firm for about 5 years and R2I? (8% cost)

a.) Has anyone does this..is it advisable?

b.) I am worried ..what after 5 years..will i be able to sell it ...cost of repair???

c.) My calcs show that i will be short by 400$ pm...incl the association fees..which i intend to send from India...(so over 5 yrs..it adds up to 10 lac.@ 45Rs/$ rate)..is it worth the effort and pain???? Currently the house is down 25%...5 yrs from now who. knows...maybe still under by 10%?



d.) i am basically looking for an impartial and practical advise... any suggestions please.???

[oasis138]

i am planning to rent out our town home thru a property management firm for about 5 years and R2I? (8% cost)

a.) Has anyone does this..is it advisable?

b.) I am worried ..what after 5 years..will i be able to sell it ...cost of repair???

c.) My calcs show that i will be short by 400$ pm...incl the association fees..which i intend to send from India...(so over 5 yrs..it adds up to 10 lac.@ 45Rs/$ rate)..is it worth the effort and pain???? Currently the house is down 25%...5 yrs from now who. knows...maybe still under by 10%?



d.) i am basically looking for an impartial and practical advise... any suggestions please.???

down -25% you are looking at a long time before this thing recovers anywhere close to you making money of it. Are you USC. If not then a foreclosure coming on your credit report shouldn't bother you.

[venkat786]

how much is your down payment? If down payment is not high, no intention to come back then you know 'foreclosure' is no brainer.

[direstraits88]

Whether USC or not, foreclosure is the only option for you. If renting gives you negative cash flow of 400 pm, it's not even an option to explore. Don't throw more money into a bad situation. Also make sure to take 1 month rent per year for repair/maintenance fund and at least 1 month "vacancy" per year in your calculations. And if the renter does not vacate, you need to hire an attorney to evict the tenant which costs money. The Prop. management company will not do it for you. They will be the middle man. But there's cost involved in it. So remote ownership is not a easy thing.. Adid to it, the stress of owning a home and tracking if price has dropped more.

There's no possible scenario of your home recovering 25%. That's 5% per year which will not happen for next 10 years.

If your r2i is confirmed then just stop paying mortgage now. You may be able to save few months of mortgage payment which you can consider as getting back part of your equity. It will be several months before your home will go into foreclosure. When you r2i, sell the refrigerator, washer/dryer, send the key to the bank by registered post and move on.

[kkr]

i am planning to rent out our town home thru a property management firm for about 5 years and R2I? (8% cost)

a.) Has anyone does this..is it advisable?

b.) I am worried ..what after 5 years..will i be able to sell it ...cost of repair???

c.) My calcs show that i will be short by 400$ pm...incl the association fees..which i intend to send from India...(so over 5 yrs..it adds up to 10 lac.@ 45Rs/$ rate)..is it worth the effort and pain???? Currently the house is down 25%...5 yrs from now who. knows...maybe still under by 10%?



d.) i am basically looking for an impartial and practical advise... any suggestions please.???

What is your long term plan with the condo? Why are you even considering renting it out?

[fido_dido]

i am planning to rent out our town home thru a property management firm for about 5 years and R2I? (8% cost)

a.) Has anyone does this..is it advisable?

b.) I am worried ..what after 5 years..will i be able to sell it ...cost of repair???

c.) My calcs show that i will be short by 400$ pm...incl the association fees..which i intend to send from India...(so over 5 yrs..it adds up to 10 lac.@ 45Rs/$ rate)..is it worth the effort and pain???? Currently the house is down 25%...5 yrs from now who. knows...maybe still under by 10%?

d.) i am basically looking for an impartial and practical advise... any suggestions please.???

Hi samay,

I have rented out my condo as I had to move to another city. I have engage a PM and pay him 10% of the rent. I am also in -ve cash flow of around 400. I have also been thinking about selling vs renting for a while and decide to rent it for a year or two and see if the market improves. IMO it is difficult to time the market and no one can really tell you if the property is going to increase, stay the same or go down in the next few years, it depends n lot of factors. I decided to take a gamble by renting for a 2 years and see if it improves. If I sell now I lose like 50K, if I rent for 2 years, I lose like 7K (10K minus the equity I make in 2 yrs).

Anyways, one option that you could consider to is to "recast" the mortgage (i.e pay a ont time payment towards the principal and adjust the new loan amount so that your monthly payment is less). This is not same as refinance, in a refinance your term will reduce but you monthly payment will be same. If I put about 40K and do a recast, my monthly payment reduces by 400 and I am even. But at the same time I am skeptical about putting any more money in the house :-)

So I would advice you to do the math yourself and compare the options available to you.