Home Selling in Santa Ana>Question Details

Sk, Home Buyer in Orange County, CA

Renting VS Selling in Santa Ana

Asked by Sk, Orange County, CA Thu Dec 19, 2013

Bought a 1/1 bedroom Condo in South Cost Metro. (Fairview /Segestrom) about 1 year ago. This was a Short sale, Conventional loan at 3.75% with 5% down payment..

I will be relocating to Stamford, CT for a job promotion next year. I am planning on renting a Studio/1 Br in Stamford.

I am contemplating whether to rent out my Condo through a Property management company or selling it. I know the home value has gone up a bit since I purchased it. Need advise of whats the best step considering market conditions . This was my first home purchase.

Help the community by answering this question:


Keep it, rent it, earn passive income, grow your portfolio. Historically real estate increases an average of 6% annually. You are in a win win situation when you take into consideration the awesome purchase you made, that is if you are in a 30 yr fixed. Think about it cheap money and you can have it be paid by a tenant. Yes there might be small headaches but the reward you may reap could be greater. If you keep making investments like this, you can become very wealthy.

Andres Morales
Real Estate Broker
Bre #1343492
949 306 9260
1 vote Thank Flag Link Tue Jan 7, 2014
I do agree with the thoughts of Andres Morales. Any investment in the real estate sector is good for future. Gaining passive money through renting is a perfect avenue for earning.
Flag Thu Jan 9, 2014
I would suggest you to rent the property. Prices are increasing day by day, so selling this condo a couple of years later will fetch you much more than you would earn now. Therefore, in the meantime you should rent it out and get a certain amount every month which would eventually bring back all the money you spent in purchasing it. You are in a win win situation.
0 votes Thank Flag Link Sat Aug 9, 2014
My wife and I had our condo on the market and we were getting some interested buyers, but the problem was that they weren’t able to get financing because our complex was not FHA certified. Our HOA didn’t realize that FHA certification was required on the entire complex for individuals to obtain FHA insured financing. Without it, we limited our buying pool to only cash investors. We’ve then learned about Association Online and they stepped in to help us get FHA certified quickly. It was so simple for us – they organized all the information and knew how to submit all that was needed for approval. Now the condo is certified for another two years, and ours is sold! You can contact Association Online at http://www.associationonline.com or call them at (970-226-1324).
0 votes Thank Flag Link Wed Mar 12, 2014
Renting or selling a house is great decision and should be taken cautiously. Though selling the house may seems popular option to you, but in some cases, turning it into a rental home makes more sense. I would suggest taking following point in consideration while deciding on selling or renting: 1. Financial situation. 2. Local market conditions for rental homes. 3. Your future housing plans. 4. Your tolerance for being a landlord. 5. State and federal income taxes. 6. Current and future home prices.
0 votes Thank Flag Link Sat Mar 8, 2014
Yes, you're right that property values have gone up and your home might have gained value. In order to give you a correct idea, you will need to provide a local Realtor with the address.
In my professional opinion, income property is great, if you can afford to keep the place, It will eventually provide an income to you plus help you pay off the mortgage now.
0 votes Thank Flag Link Thu Dec 26, 2013
Hi SK,

I agree, this is an awesome opportunity to expand your portfolio with a rental property. As with most investments, there can be some risks and headaches however market conditions are in your favor. Most predictions are for slow and steady appreciation over the next five years.

Best of luck to you on this exciting new chapter in your life!

Barbara Grandolfo
0 votes Thank Flag Link Fri Dec 20, 2013
Hello SK,

This could be the start of your investment portfolio California has great weather and you can come back to visit, get another promotion down the road in life or settle down in California
Many options that come into play
Would need to know more about you to help you in your decision making and goals
We can discuss your situation pros and cons that are important or a concern to you

-- Investments, rentals, buying, selling, 1031 exchange. I have done for clients and have done for myself for 35 years

Talk to you soon

Ingrid Ski Realtor
0 votes Thank Flag Link Fri Dec 20, 2013

I can see you already have good responses below.
Also, you may want to keep in mind that if you sell years later you may be considered an investor and Uncle Sam will take his share vs now being your principal residence you can keep most of you equity

I specialize in helping people buy or sell in Santa Ana. I am very familiar with your area for rentals as well. I even know your complex manager S E. Also, I partner with Lou Mac who has been listing and selling in Lakeshore for over 25 years.
Give me a call if you would like to talk about your options in detail.
I live and do most of my Real Estate business in Santa Ana

Feel free to google me for more info

Javier Robles
0 votes Thank Flag Link Thu Dec 19, 2013
Congratulations on your upcoming promotion SK.
When contemplating whether to rent or sell you need to factor in the true costs.
You would become a first time landlord.
Costs involved will be.
Mortgage which includes, principal, interest, taxes, hazard insurance, hoa, plus mortgage insurance.
Property management fees, which could be 5%-8% or more on a 1/1 condo.
Agent commission.
Maintanance, remember your tenant will not take care or pride in your property like you did and you will need to prepare the property for each new tenant. i.e. paint, clean carpets, etc.
Vacancy between tenants.

What is the total compared to the potential rent? How much will your net be at the end of the year?

If you are thinking about keeping the property to gamble on appreciation, don't. Keep it for cash flow or sell it.

I handle about 40 transactions a year. I also manage over 60 rental properties. Make your decision on the facts not the what if's.

I am available to discuss if you want to go into specifics.

Congrats again on your upcoming promotion!
Abraham Lee
Executive Vice President / Realtor
Nakoma Realty Company
0 votes Thank Flag Link Thu Dec 19, 2013
My monthly mortgage is $750 + $275 HOA. = $975. Property taxes are about $1600 ( included in mortgage). I have seen rentals in the area going for $1200, so there is potential for good rental income but at the same time, i am afraid of any property damage or potential tenant problems since i will not be around to check on the unit...
0 votes Thank Flag Link Thu Dec 19, 2013
Not sure these numbers make sense to rent.
$1200 rent - $975 = $225x12 months = $2700 annual gross
$2700 gross - property management or agent commissions $720 = $1980 left
If it takes a month between tenants to clean it up and get it rented that is another $1200 lost.
$1980-$1200 = $780.
If you have to pay for a new coat of paint or to get the carpets cleaned, there is a few hundred there.
$780-$300 paint - $150 carpet cleaning = $330.
If there is a garbage disposal not working or a broken toilet valve, you will have to pay for a plumber, etc.
Not much left at the end of the year. If you were my client, not sure I would recommend you keep it.
There is a chance the value will go up, but there is also a chance the value will go down. Last thing you want to do is get stuck with it and lose any equity you had.
These are just my opinions based on the information you have shared.
Thanks for posting the question.
Abraham Lee
Executive Vice President / Realtor
Nakoma Realty Company
Flag Thu Dec 19, 2013
As a Rental, you would net some cash flow, but you do have a valid point regarding the damage and tenant problems. One thing to consider is if you could afford the place if it was vacant for a month or two. That's a large amount of money to factor into your budget.
If you would like to work with me, I would be happy to set up a time we could meet and go over all your options in detail!

Nicole Fedorchek, Realtor
Tarbell, Realtors
Flag Thu Dec 19, 2013
Hi, SK!
This is a great question, and a situation that a lot of people find themselves in! I am happy to assist you!

A couple of key question to ask yourself are "what are the chances that your job will bring you back to Southern California at some point?", and if that happens "What are the chances that you would want to move back into your condo?" If the answers to these two questions are "No", then it might time to sell. If they are a "Yes" or "Maybe", you could lease it out, and potentially grow equity in your absence.

Rentals in your area for 1bed/1bath run about $1200-1500 a month. Current market values in the South Coast Metro area are approximately $180-200k.

These numbers are just an estimate, to give you an idea of what to expect. The next step would be for me to meet with you, and review the specific details of your property. For a sale, I would provide you with a Competitive Market Analysis, and a Seller's Net Sheet. These two documents will give a better understanding of your financial situation in the event of a sale.

For a rental, I will also provide you with current market information, and recommend a lease amount.

Contact me today to get the process started!

Nicole Fedorchek, Realtor
Tarbell, Realtors
0 votes Thank Flag Link Thu Dec 19, 2013
If you think you will come back to CA thwn it might be wise to hang on to it and rent it out depending on what your total monthly payments are vs what you can get for rent. I have been managing property throughout Orange County for over ten years combine with my partner who has managed for 30 years. If you would like some guidance, shoot me an email with your contact information and I will get back to you.
Lori Hanson
BRE 01405146
0 votes Thank Flag Link Thu Dec 19, 2013
Hi Sk-

I would suggest giving me a call or e-mail me the property address so I could run some figures, property tax, HOA etc. and pull the comps. for leases and for sale near your area.

Thank you,
Sarah Masri

Aspero Realty
0 votes Thank Flag Link Thu Dec 19, 2013
Search Advice
Ask our community a question
Email me when…

Learn more

Copyright © 2016 Trulia, Inc. All rights reserved.   |  
Have a question? Visit our Help Center to find the answer