moneysma
Confused about dryer sheets
- Joined
- Aug 7, 2013
- Messages
- 4
Hi everyone,
Question regarding an investment property I own. I bought my house in the summer of 2007 and watched as prices dropped. In 2012 I moved in with my then girlfriend, now fiancee into her house. At the time, my house was about $20K underwater.
I didn't feel like raiding my investment accounts to pay down the mortgage to sell it, and I always wanted to have a portfolio of rentals, so I rented it out.
I currently have a tenant (who resigned a lease through 6/14) and she is great - takes almost as good care of the place as I did. I charge her above market rate for rent. The problem is, even with the rental income, I still lose money each month, to the tune of $225.
The $225 is after taking everything into account - mortgage, taxes, insurance, HOA, etc. The house is still underwater, roughly $15K.
When I get married later this year, my fiancee and my combined income will exceed $150K, which if I understand correctly, means I can't write off the rental losses anymore.
I'm not sure if I should bite the bullet and pay the mortgage so that it isn't underwater and sell or keep it and refi or keep it and do nothing.
My current interest rate is 6.375%. If I were to refi, I'd need even more cash since my understanding is that I need 20-25% equity to refi an income property. I've run the numbers and assuming I could refi to 4%, my monthly loss would change to a gain of $275.
I'm just not sure how to analyze this. I think my thoughts are being clouded by having a good tenant and always wanting to amass a handful of rental properties to provide income so I could retire early. I need an outsiders thoughts.
Thanks...and sorry for the length! I can provide more detailed info if requested.
Question regarding an investment property I own. I bought my house in the summer of 2007 and watched as prices dropped. In 2012 I moved in with my then girlfriend, now fiancee into her house. At the time, my house was about $20K underwater.
I didn't feel like raiding my investment accounts to pay down the mortgage to sell it, and I always wanted to have a portfolio of rentals, so I rented it out.
I currently have a tenant (who resigned a lease through 6/14) and she is great - takes almost as good care of the place as I did. I charge her above market rate for rent. The problem is, even with the rental income, I still lose money each month, to the tune of $225.
The $225 is after taking everything into account - mortgage, taxes, insurance, HOA, etc. The house is still underwater, roughly $15K.
When I get married later this year, my fiancee and my combined income will exceed $150K, which if I understand correctly, means I can't write off the rental losses anymore.
I'm not sure if I should bite the bullet and pay the mortgage so that it isn't underwater and sell or keep it and refi or keep it and do nothing.
My current interest rate is 6.375%. If I were to refi, I'd need even more cash since my understanding is that I need 20-25% equity to refi an income property. I've run the numbers and assuming I could refi to 4%, my monthly loss would change to a gain of $275.
I'm just not sure how to analyze this. I think my thoughts are being clouded by having a good tenant and always wanting to amass a handful of rental properties to provide income so I could retire early. I need an outsiders thoughts.
Thanks...and sorry for the length! I can provide more detailed info if requested.