My wife and I are under contract on a single family home and are unsure of whether to keep the condo we still live in or sell it. We have two kids and have outgrown it, so that is why we are moving up. We have differing opinions on what to do with it.
If we keep condo and rent it out, at best we will have only $200 positive monthly cash flow (but quite possibly only $100), which is why it makes no sense to me to keep it. One costly repair is all it takes to mess up the plan. I know there are tax savings, depreciation, etc. but I believe you really need to rent it for several years in order for depreciation to be a factor...is that correct? During that time, there will be needed remodeling to pay for since it hasn't been updated in about 12 years, which of course adds more cost. To me, it sounds like a possible money pit. Having little monthly cash flow while waiting for a property to increase in value doesn't sound like a good plan to me and it sounds dangerous. Even though we can afford it, it seems like a waste of money.
I overpaid for the condo 10 years ago for 248k and it's now worth about 180k (we owe 137k), so I understand why my wife wants to try to make some more money back by keeping it and renting it out, but it sounds like a losing battle to me and still just doesn't make sense in my opinion.
I greatly appreciate any feedback from Mark or any members with this experience. Thank you!