Rehab And Sell It For Profit (?) Or Keep And Rent Out?
I own property for few weeks and it's all fixed up by me and ready to sell or rent?. Could net after sale $15-17,000.or rent and have positive cash flow after expences $200-300.00 a month doing section 8 rental. Never done rentals before. Real nervous. Any advice??? 
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Why would you play to your weaknesses, when you can get your money back out, plus $15k??
Section 8 rentals are not the cash cows everybody makes them out to be. They can be a real pain from what I have heard, though I have no experience, so others should comment on that side of the picture.
to me, rehabbers should buy, fix and rent in moderate to strongly appreciating areas of the country IF they have achieved a certain financial strength in their lives. Then they are building a portfolio of assets to generate cash flow, and I think that is smart, though there are real headaches with being a landlord. it is not for everybody.
But early to mid career, fixing these yourself, for god's sake, get your money back out, get your profit, do more deals, and grow your capital base.
If you have title seasoning problems on the flip, since you have owned it for such a short period of time, there are programs that allow you to sell to the end buyer with seller financing ZERO down, and you can sell the note at close for cash, with a minimum discount off face value, and cash out entirely.
Hope this helps, and best of luck to you. Dave
I think davehays hit the nail on the head. You say you have no experience with rentals and on top of that you are very nervous about renting property. It seems to me that "you" would be more comfortable selling the property and netting your 15k to 17k profit.
I'm not telling you not to consider buy/fix/hold/rent but it seems that you are uncomfortable with this method of investing. And then you have to consider it takes a little over 56 months at $300.00 per month positive cash flow to accumulate your $17k potential profit. Not to mention that you then become a landlord, have to maintain the property for the tenant along with expenditures for things like plumbing problems, heating/ac problems and the like.
Good Luck whatever you decide.
Dave
[addsig]
You have tax consequences to consider also. My vote would be to hold and rent. If you are not comfortable doing that then find a management company that is.
To me this is all based on what your financial status is and how you would put the money to use. Use the chunk of money now, heavily taxed. Or use other money, keep this chunk appreciating in the house and sell down the road with lower taxes.
With the limited information there are about 1,000 different roads to go down from here, ultimately you have to decide what makes the most sense for you in your business plan, financially, short-term goals, long-term goals and on and on.
I wuold love to keep this property to build up equity and my portfolio, since everything moving up in price. I assume a lot of investors who is using this site have rentals themselves. Share your expirience please....
If you have enough equity in the propery (> 80%) why not do both? Refi and take out a portion of the equity then rent for a year or so and avoid the tax consequences. at the end of the year you can sell an already rented unit which may have appreciated and be rid of the hassles of being a landlord.
P.S There are good and bad section-8 tenants, just like everybody else. You need to screen them carefully before you rent/ which will include speaking to their current landlord and maybe even a visit to their current home.
whatever you decide you're in a good spot
Section 8 is a crap shoot. Pending on the existing condition of the property, you should question wehther you want children marking up the walls with crayons, and your heating system running 24/7 remember section 8 tenats are never at work, and they will run up the utility bills and potetially eat up that $200 profit
this could be your chance to get into rentals. you have to decide for yourself do you need cash up front or want to hold. i have done rentals and don't like dealing with renters. i now do l/o's instead.........km
I'm sorry I could not understand what you mean by "I/o's"? Also isn't the tenant suppose to pay for all utilities? Thank's.
Quote:
On 2005-01-07 02:40, kenmax wrote:
this could be your chance to get into rentals. you have to decide for yourself do you need cash up front or want to hold. i have done rentals and don't like dealing with renters. i now do l/o's instead.........km
I have done both renting and re-habbing to sell. I am finally dumping my last rental property this spring. I feel that I have much more control of my own destiny with re-habbing and flipping. Unless you have a large amount of units making great returns and professionally managed, the smaller 2-3 family units can be a headache.
I know this is not directly related, but an article in a business section this morning talked about the declining dollar and how countries like China could seperate themselves from the dollar to compete could be disaterous sending interest rates up as much as 2 points over the next 24-36 months. If you decide landlording is not for you in a year, you could walk away with very little to show for it if rates rise dramatically. Some might not agree, but that's my 2 cents worth.
I would hold and rent and see how that goes... I've had a couple section 8 tenants (still have 2) and I have had nothing but good things to say about the program, the tenants and the section 8 office I deal with. I cannot guarantee every section 8 tenant/office will be as good but this is my experience with it!
Good Luck!
[addsig]
l/o - lease with option to buy........good luck.....km