sell or rent out need help

[msplants]

Hi all,

I haven't posted for awhile but really need some opinions here on what you would do.

We bought an investment property that we are living in and now we are moving to another state.

Things happened over the past 2 years to where we have not been able to make the needed repairs to the house.

We are trying to decide if we should sell or hang on to the place and rent it out.

Factors are I can barely make the mortgage payments on it. My husband lost his job back in November and hasn't found work.

I am looking for work in another state that pays more. he is in school and has 2 months to finish.

We owe about 323k on the mortgage. The house needs repairs as the roof is leaking and the gardens and lawn need done and new flooring in the main areas of the house as the carpet is from the 70s and it is worn and has holes in it.

We have already painted the interior and are trying to scrape up enough money to tile the main areas. It is a small house 4 x 1.

If we rent it out I don't think we can get more than around $360 a week rent on it and our mortgage payments are $550. Add that to the cost of renting in the new city.

I feel that we are stuck either way as the repairs would have to be done before selling or renting it out and I just can't come up with the money to do it.

I think if we sold it we would take a loss on it meaning unrepaired it might go for around 320k. Houses in the same area that are in ok condition are going for around $340k to $360k.

I can't borrow any money as the major problem that happened has my credit card maxed out and i am trying to pay that down.

Any advice would be appreciated.

 

[nkirlew]

Gee, sounds like you are having a tough time of it and I would recommend seeking financial advice from an agency in Perth.

But here is my spin, don't move until you can fix the place up and then rent it out. Try to avoid selling at a loss. Try to avoid selling altogether.

I know there is plenty of commentary about swapping out a poor performing IP for a good IP, but I always hate the thought of all the taxes and fees that were paid at the front end of the deal and you may not be buying again unless you had a deposit.

A couple of my friends rent a room in the house to a student, not for everyone I know, but generally students are grateful for a 'home' as distinct from a student share house. You need to be near transport and so on.

My wife and I learned how to floor tile, three dimensions is the hard part, but with a rug over the 'toe stubbers' we are happy with the result.

Nick

 

[jingo]

Hi all,

I haven't posted for awhile but really need some opinions here on what you would do.

Sorry to hear that you are going through a tough time at the moment. Hope things begin to look up soon. I'll have a go at going through your post.

Factors are I can barely make the mortgage payments on it. My husband lost his job back in November and hasn't found work.

I'd evaluate as to how much stress holding the property is having on your life with your husband and family. If the stress is too high, it may be worth cutting your loss and letting go.

I am looking for work in another state that pays more. He is in school and has 2 months to finish.

If you manage to find a higher paid job and your husband finds a job, then obviously the current stress will disappear and you will be able to find money to repair the property and perhaps keep it for the long term.

We owe about 323k on the mortgage. The house needs repairs as the roof is leaking and the gardens and lawn need done and new flooring in the main areas of the house as the carpet is from the 70s and it is worn and has holes in it.

Sounds like it wouldn't rent or sell in its current state. Are you able to increase your borrowings to do the necessary repairs? (Or use money from a redraw or offset account?)

We have already painted the interior and are trying to scrape up enough money to tile the main areas. It is a small house 4 x 1.

Ok, good. You may need to repair the roof though, otherwise your painting work may be in vein.

If we rent it out I don't think we can get more than around $360 a week rent on it and our mortgage payments are $550. Add that to the cost of renting in the new city.

Yes, if you manage to find a higher paying job, and your husband finds another job, then this shouldn't be a problem. Currently, it is though.

I feel that we are stuck either way as the repairs would have to be done before selling or renting it out and I just can't come up with the money to do it.

Probably best to borrow more money if you can to repair the property to either sell or rent out.

I think if we sold it we would take a loss on it meaning unrepaired it might go for around 320k. Houses in the same area that are in ok condition are going for around $340k to $360k.

If you sell now, you won't have enough to clear your current debt which means doing the repairs and holding on until there is some capital growth in the property is worthwhile considering.

I can't borrow any money as the major problem that happened has my credit card maxed out and i am trying to pay that down.

Are you able to borrow from family, or friends?

Otherwise, assess how much you will loose by selling and the loan that will be outstanding. How long would it take you to pay out the remaining debt?

Do you have any other property in which, if you sold, could be used to roll the remaining debt into??

You may need professional advice. Can you seek out some free advice from centrelink?

All the best with it and I hope you can both find good paying jobs very soon.

Regards Jason.

 

[scottr]

i hate to say it but it sounds like maybe the best option would be to sell (just my thoughts.)

Why go through years of pain when its avoidable