To Sell or Rent a 2BR 1BTH with all major updates done?
My wife and I are ready to move into something bigger than our 970sq ft 2BR 1BTH house, but are not sure the best route to take. We've done all of the major updates (furance, A/C, windows, roof, finished basement, exterior doors, driveway, backyard, kitched & bathroom update). We're being told that our listing price should be about $2000 over what we paid in 04, however that will leave us very little to nothing after commission assuming it even sells at that price.
Should we look at renting for 1-2 years? We've checked with a loan officer and on paper can afford 2 houses, and as long as we have someone in the house the other mortgage is paid. Is it worth the gamble to get a try and get a higher return in a year or 2? We know its all about our comfort level, but we don't want to throw away 4 years worth of work and get no return.
JD-
You certainly may garner a higher price for your current home if you wait for the market to stabilize then grow - but no one really knows when that will occur. You could speak with dozens of agents and read all of the economists predictions and be no closer to that answer.
But here's what we do know. We're all in the same market. Since your plans are to move to a bigger and presumably more expensive, the price of your future home should be less than it was 4 years ago. If your home is worth $100,000 in a "normal" market and the home you're buying is worth $200,000 - and home prices are off 10% - then you're selling for 90k and buying for $180k and when the market rebounds, you're up 10k.
With respect to your upgrades, imagine what your home may sell for had you not done the upgrades? And in buyer's market where choices are many, you've placed yourself in a better position to sell quickly. Given the fact your lender says you can handle both properties, if you can stomach being a landlord, it may be a great move to rent the current home - off-setting that mortgage - and wait to sell until the home value increases. Or just enjoy the rewards of an income producing property.
Remember, either way, you're buying your new home in a buyer's opportunity market. Good luck with your decision and if you'd like to speak personally regarding your situation, don't hesitate to call us at 937.433.HOME or contact us at our web-site.
If you can get a good renter that might be a good idea. I have told some of my sellers that might be the program for them. Also, did you over improve your house for the area? It is always best to be in the middle of the neighborhood, not the largest and best or smallest. When remodeling was it for yourself, or was there consideration for what the market would bear in your location upon resale? Also did you buy too high? I have told several clients if they are in doubt they may want to get their own appraisal. You also have to consider the 4 years of work as you stated..how relevant is that to moving on to a new chapter in your life with a new home. Do you have the time to deal with a rental for two or three years? Is the rental market good enough in your area to find a tenant that can maintain the rent and pay your mortgage? Good luck..
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