Being a landlord can be a great job. Especially since landlords exist for every rental tenant. Done properly, a landlord can thrive financially. However, sometimes, it is a struggle just to pay for expenses. I own a couple of properties throughout LA County. As a real estate investor, I have to find ways to make properties lucrative enough to pay for themselves. This wasn’t the case for a condo in Canoga Park that I owned. It went underwater soon after I bought it.
The Problem with Rentals Tenants
In some cases, owning rentals is just not fun. For me, this Canoga Park condo was a headache almost from the beginning. I had a bad tenant (I usually call her the Excuses Queen since she always had a reason for not paying rent or for causing problems). I also had one great tenant who is still renting from me even now, in fact.
The problem I was having is that the rent just barely covered the mortgage and the HOA dues that I must pay on the condos was high. I was not getting any income at all from the property and I was doing everything I could to keep from losing money.
The Good News
I have recently gotten good news though. Because I own the property, I keep up with other properties in the area. I get alerts when they sell so that I can see how much they sell for. As the value of these properties goes up, the value of my condo does too. I am so excited to report that I am no longer underwater!
I didn’t realize how much it was weighing on my subconscious until I did get afloat. Now, I feel as if a huge weight has been taken off my shoulders.
To Sell or Not to Sell a Rental
Now that I am no longer underwater, I have to ask a very important question. It’s one I ask regularly in my blog, “Is it time to sell?” I have to consider the positives and the negatives before making a decision. My choice was split, until I looked at both sides of the equation.
The pros are:
- I have a terrific renter already in place, and
- my only out-of-pocket expenses are annual property taxes
But, the cons are:
- the market is slowing down fast
- if interest rates go up, the price will go down
Based on these last two factors, I have decided to sell the condo. I don't want to see how things go in the next year. There is a good possibility that the value could go down as the market weakens. It’s important to keep up to date on every little detail when you own rental property as I do. I keep an eye on the market constantly. This way, if there is a change, I will be able to make the right decisions for my finances.
Finding out that my condo is now afloat was a big day for me, and it still makes me happy to share that news. I wouldn’t have known about it though, if I didn’t keep up with the market news for the area.