Time to Sell, or Continue to as Landlord???

[Erakad]

I'm probably going to lose $20K in the next couple months no matter the decision. Question for the collective, I've been out of country too long.

I own a home, and have been renting it the past 2 years. Like many, I'm upside down. My current renter is moving on. My choices: sell under the government HAP program, or lease for 2 more years. House is in an excellent area, at the RIGHT time of year it rents fast...this is not the right time of year.

HAP: I haven't been accepted, it can take up to 2-3 months to be approved, therefore empty house. Local market must drop at least 10%, realtor fees are paid by the government. IF accepted, we cannot sell low immediately or the government feels you're dumping it. The realtor suggests starting at the top of the local market analysis result, then dropping the price $25K every 2 weeks. At that rate, it will take 2 1/2 months to get it down to market...say another month to sell. Seller would have to wait pending our being accepted into the HAP program, since I can sign a contract at any time stipulating sale is based on HAP approval. But still, no guarantees we'll be accepted.

Rent: Have a reliable couple that will sign a lease on Mon for 2 years. Have checked with the mortgage company. A $20K investment to refinance the 2nd, plus a rate drop in Feb on the 1st, will get the mortgage down to what it rents for (I've been losing money every year...but not paying a lot in taxes either). This will get us through Jun 2012. If the market is still down, I could conceivably still reapply to the HAP program. If the market is up......I could end up writing more checks.

So, where do you see the market going??? I'm tempted to rent it and kick the can down the road - or - should I just be done with the house once and for all (and take the loss now), since the market is doomed to plummet.

[Jim Bremner]

It depends on where the rental is. if it was in a area that's going to hell in a hand basket GET out!

If there's a 60% chance that it will recover in 3-4 years stay in.

The thought is that the U.S will recover like it always has... But it will be 2-3 years. minimum

I'm thinking more like4-5 years if the gov. pulls it's head out to see that no country has ever lifted it's self up by the bucket handle while standing in the bucket of high taxation.

Do you plan on coming back to the States?

Do you plan on staying in Japan?

Look long term.

[Dantilla]

I would probably keep it.

[id10t]

When is the right time to rent (when they go quick)? If it is in the next 3-4 months, I'd say that toughing it out until then and then re-renting/leasing it out may be better...

[Evans, Marv]

I'd say leasing it to the nice couple is a no-brainer. The market is going to be nothing but bad for the immediate future, so the lease would buy time. In two years, hopefully, it may recover somewhat and put you in a better situation - I don't see it being worse than now, although there is no guarantee.

[Erakad]

As I've said, I've been out of the country too long...I just don't have a good feel on the "recovery". The house is 10 yrs old, have never had problems, and in a great neighborhood in DC. We had a realtor showing the house, when the rentors fell into our lap...they heard about the place through the grapevine. I keep telling my wife, "a bird in the hand", but then being out of the landlord business is tempting.

[id10t]

How much do you want per month for the place? A coworkers brother is about to move to the DC area...