Home Selling in 48239>Question Details

Julie, Both Buyer and Seller in 48239

Continue to rent out, or sell and run?

Asked by Julie, 48239 Thu Oct 21, 2010

I own a home near Western Golf & CC, but have since relocated to Los Angeles for work. In fact, I posted a similar question on here about two years ago, and I'm back to ask you again. I'm watching my home value continue to fall, and crime continue to rise. I owe about $123k on it. It was appraised for refi back in 2005 for $140k (and $190k in 2001), but I doubt I'd even break even with my mortgage at this point.

I am renting it out for a meager profit every month, with a management company, but I'm scared of my tenants falling behind in payments (they have in the past), and having to pay it all by myself. Their lease is up in a few months, and I don't know what to do.

Should I cut my losses and run? Continue to rent it out and hope I keep some tenants in there, and the market eventually comes back? I also know that my next door neighbor is planning on putting up her house for sale in spring, so there would be competition. Neighbor behind me is listing at $94k.

What would you do?

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Answers

8
Check with your Realtor about local rental rates. We actually have a shortage of decent rentals in Birmingham/Bloomfield so rents have gone up! It's not a terrible time to be a landlord even though you don't want to be one. Remember too that there are some tax advantages, so make sure your accountant is helping you with those.

Personally, I would not run. You might be able to do a short sale if you decide to sell, so talk to your agent about that.
0 votes Thank Flag Link Wed Nov 10, 2010
Maureen Fran…, Real Estate Pro in Birmingham, MI
MVP'08
Contact
Julie -

Personally talk with 3 Realtors and see what they each have to say about your specific situation. When you say "Run" - to where ? Unless you do a short sale and get the lender to approve it, you may still be responsible fo rthe deficiency (I don't know the laws of Michigan so speak with an attorney)

On the other side, everything I am reading here in CA is that Michigan is going to turn around faster than everywhere else - so this may correct itself in the next few years.

Chat with family, friends, and 3 great local Realtors and make an informed decision.

Best of luck,

Thom Colby
Broker / Owner & Certified HAFA Specialist
Thom Colby Properties
Newport Beach, CA
Moving Lives Forward (TM)
We NEVER DOUBLE-END Transactions in our Brokerage. There is NO benefit to the Seller or Buyer and only benefits the Agent. Also, NEVER use your RE Agent / Broker as your Lender or vice versa. Also, be careful when using Real Estate Broker-owned Escrow and Title Companies - they can be loads of trouble.
888-391-5245 Direct Cell
THOM@THOMCOLBY.COM
DRE# 01398570
0 votes Thank Flag Link Sat Nov 6, 2010
Hi Julie,

I would agree with Todd & Monir to ride the storm out if at all possible, but if leasing the home is causing you more stress & headache than a slight profit may be worth you might be better off selling. Has an agent completed a market analysis on your home to see what it is actually worth? If not contact me today for a free market analysis since you will need to know your homes true value before you make a decision to sell or keep leasing it out.

Rick Johnson
Century 21 Premier
Direct: 734-446-4386
Rick.Johnson@century21.com
0 votes Thank Flag Link Sat Nov 6, 2010
If you are making a profit and you think you can find another renter, keep it.

The market WILL come back. More specifically, your home's price WILL come back. The dollar is deflating fast these days due to government deficit spending being out of control. Just this week inflation-protected bonds sold for a NEGATIVE short term return -- meaning Wall Street is factoring in inflation, and SOON.

If you can't beat those slimies, join em. If you want to sell in two or three years, you'll probably be able to exit at a decent profit. If you aren't losing money and your stomache is doing ok and you can sleep at night, hold on for the ride. As a trained economist, that's my best advice.
0 votes Thank Flag Link Tue Oct 26, 2010
Hi Julie

Just to give you an up-date, the house on Delaware does have an accepted (pending) offer (21 days on the market). Also, If you would like one, I would be glad to provide you with a no obligation Comperative Market Analysis of your house.

Sincerely,

Mike Warren, CDPE,SFR
Keller Williams Realty
email: mikewarren@kw.com
734-634-5868
0 votes Thank Flag Link Tue Oct 26, 2010
Julie, I would try to ride out the storm if possible. Check out this article from Yahoo Real Estate...Michigan is primed to be one of the highest appreciating markets by 2014. Michigan has been hit hard, but there are signs that we are at the bottom. Jobs are starting to come back, the Big Three were all profitable in the 2nd quarter, and there are many economic initiatives in Michigan that should begin to take hold and turn the markets around.

I would stick it out at this point. Remember, the worst time to sell is at the bottom.

Todd Brittingham
Michigan Turnkey, LLC
Ph: 248-917-4416
Fax: 248-419-1746
todd@michgianpropertybuyer.com
http://www.MichiganTurnkey.com
0 votes Thank Flag Link Thu Oct 21, 2010
Julie,

You should certainly speak with an experienced area agent, in-detail, about your options. There are many questions that need to be answered before someone could give you some clear guidance.

If you would like to speak about this further, please contact me through my Trulia profile, or email, Derek@DoorToDreams.com

Hope to hear from you. Thanks, Julie.
Web Reference: http://DoorToDreams.com
0 votes Thank Flag Link Thu Oct 21, 2010
Hi Julie

Your house is in a very desireable area of Redford Township. Unfortuanately home values in Redford have been greatly impacted by foreclosure. Approximately 70% of the sales in 2009 were bank owned and from
Jan. to August of this year approx. 60% of the sales were bank owned houses. During the last six months
4 houses in Redford (with Redford Union Schools) over $90,000 have sold, there is one currently pending, So you are in a price range were there is currently not a lot of demand or movement. The house on Delaware for $94,500 is an estate, looks like it may need some up-dating. It is hard to say if the market has reached the bottom and it may be a while until it rebounds. If you have the financial resources, it may be best to cut your losses and sell the house and not have to worry about things in Redford (may want to consult your tax advisor). There is a lot of demand for rentals in the area, but it is always tricky getting good tenanants. You may want to put the house up for sale and rent and see what interest there is. You do not have a easy decision. Call or email if you have any further questions.

Sincerely,

Mike Warren, CDPE, SFR
Keller Williams Realty
734-634-5868
email: mikewarren@kw.com
0 votes Thank Flag Link Thu Oct 21, 2010
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