Home Selling in 18069>Question Details

Tom, Both Buyer and Seller in 49546

I've been on the market since Aug 2007 Listed at $529 - now at $459 - almost no traffic or interest. Should?

Asked by Tom, 49546 Thu Jan 31, 2008

I wait it out or try to lease? Want to buy in another city.

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Depends on a variety of factors. I'm not an accountant, so this isn't financial advice. However...

You say you "want to buy" in another city. In today's market, with the experience you're having (which is not atypical), my first reaction is don't sell unless you HAVE to buy in another city. Wanting to buy is a pretty weak reason, in most cases, today.

But let's say you're determined to end up in a new city. If you rent the property, will you have a positive or negative cash flow? If so, how much? (When calculating cash flow, take into consideration potential vacancies--up to 2 months a year, or 16% of the total rentable time. Also take into consideration repairs and upkeep--about 1-1.5% of the property's value per year.) Can you afford the very likely negative cash flow?

Assuming you can, recognize that a lender will discount your rental income. Let's say your house rents for $2,000. To account for vacancies and repairs, a lender will factor into its debt-to-income calculations a rental income of about $1,500. That will drive down the size of the loan you'll be able to get on your new house. Also, by not selling, but only renting, you probably won't be able to pull any money out of your present house for a downpayment on a new one. That's fine, if you have sufficient cash. Do you?

Then there's the hassle of renting. Of finding tenants. Of handling the repairs. Are you prepared for that? Or will you use a property management firm? Some are good; some aren't so good. If you plan on using one, factor that cost into your cash flow equation.

I'm not specifically trying to talk you out of renting. Again, I don't know your circumstances and motivations. It could be the right thing for you to do. However, for many people, in many circumstances, in today's environment, it's probably not the best move. But do the calculations. Then make your decision.

Good luck.
0 votes Thank Flag Link Thu Jan 31, 2008
Don Tepper, Real Estate Pro in Fairfax, VA
MVP'08
Contact
May I ask if you are a for sale by owner and where is your property located.
Web Reference: http://loubandb.com
0 votes Thank Flag Link Thu Jan 31, 2008
Are you selling for sale by owner?, are you over priced, what was the overall feed back you received from the last showings?. are you advertising enough?,answers to these questions can help you in your quest.
you can always make an offer on your new house with the condition that your current one sells.
0 votes Thank Flag Link Thu Jan 31, 2008
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