Laura, you can do anything of the things you mentioned with this property. It really comes down to what you want to gain from this deal. Do you want all your cash now? Then sell it to a retail buyer. If you want the most possible from the deal even if that takes time, then do a lease/option. If you want to build your net worth and have all the benefits of depreciating the property and getting the tax write-offs, then keep the property and rent it.
One other thing to consider is do you mind dealing with tenants, or will it be a headache for you?
Hi all, I wanted to run this deal through the board here, to hear suggestions on the options available and how to proceed. I apologize if I leave out pertinent information…but here it is.
A mortgage broker/friend of mine hooked me up with a loan on a large one bedroom house with an unfinished basement (possible second bedroom). My closing costs totaled $386. The house appraised at 158K, I bought it for 135K. Comparable sales values support the appraisal. The mortgage is $990/month. The area is downtown in a “pricey” area, in fact last year the properties doubled. Estimated repairs and advertising total about $600. The house is advertised for sale in a few of the local papers, plus I have street signs that have received attention and phone calls. I understand a few of my options, but would like opinions or experience from others about what might be the best option. I could sell it outright for market value; I could offer a lease option (ask enough of an option fee to cover my expenses put into the house), or I could rent it and let it increase in value. I know it’s a good idea to have a plan for a property as soon as it is bought, but just thought I’d read some input on various options in case plan A doesn’t work.
Thanks for the help. It’s a bit scary, but also a relief to have started action!