Hopefully Letting Go

The folks at the Waterford home are interested in buying. We are interested in selling. However, we are coming in writing a check. Though, I don't recommend this scenario, this upfront check will be less than the loss we will take if we keep it another year.

One of the main reasons we are selling is that the neighborhood is seeing diminishing rents. The last two years I have noticed this, but managed--in both cases--to find the only tenants in the area who weren't paying attention to what their neighbors were paying in rent.

The first ones had bad credit and worse housekeeping skills. I ended up replacing the carpet and painting walls that shouldn't have needed to be painted when they moved out. The second have better credit and realized their poor shopping skills early on. Essentially, they aren't staying past their lease when they can rent the house down the street, or even buy the house down the street, for much less.

I can keep this house, but I expect to take a $200 gross hit in rent. That would be what I loose before Kirby, the property manager, takes his rightful cut. The way I estimate it, if I ask market rent price for this home, it is about $200 less than I am getting now. With the influx of homes available for rent in the area, it will still take at two months to get it re-rented, maybe even more, as the tenants' lease is up in November.

Then there is the HOA.... The HOA cut out about $900 in late fees and fines off my bill when I paid it last week. I was two years behind (which, if I am doing the math correctly, means the first tenant--the original tenant--I had in place, paid the HOA for a number of years before she moved out). At any rate. The HOA isn't going away. I don't want to write another check to them. Ever.

And, there is the biggie. If you learn anything from this blog, gentle reader, it is this: do as I say, not as I did.

We bought the property with a little down and an adjustable rate mortgage (and for any reader who might likely make a comment about adjustable rate mortages--please don't. I learned my lesson). In theory the loan is going down next month. But, I haven't seen a letter from the bank proving it. That said, I am estimating the payment jumping significantly, at which point this home will be a perpetual loss for us. As a company, we can cover one upside down mortgage if we have to. But, I would rather not.

So, it boils down to this: are the tenants willing to save the moving costs to buy the home they live in? I sure hope so.