The house that no one wants, but I'm stuck with
December 13, 2013 3:15 PM   Subscribe

I'm in a pickle - I own a house that I've been renting out for several years but things recently soured with the tenants and property managers and it is now vacant. Listed for sale but market is painfully slow - should I hold out for a buyer or list it for rent again?

Quick background: Bought the property in 2007 (in suburban Kansas) for use as a primary residence. Sudden layoff + extended unemployment led me to start renting out house via property manager 2009 - 2013. New job required me to move far away (first to the east coast, then overseas) - I currently am stationed in Germany till 2015. Tried briefly selling property in 2009 before renting out, but the lowball offer I accepted fell through. Listed house again Nov 2013 when relations with property manager soured.

- House had unusually good "bones" for the area (many houses in the neighborhood have hidden structural defects and water-leakage issues, but mine is quite solid) but admiteddly needed a little minor TLC and a few cosmetic updates.
- House is close to a school and very nice park. Is in a cute 1940-1950s era suburb away from major roads and highways.
- Area is extremely quiet, lots of families with young kids and retirees (e.g. few young people in the area or colleges nearby). The vast majority of houses are owner-occupied. Guess this could be good or bad.
- Thanks to careful planning and years of saving, I have a ton of equity (approx 27-28%) and am otherwise in pretty good financial shape.

- House has a very unusual spiral staircase on one side of living room leading to basement (only other entrance to basement is through garage, common in houses that age). I liked it, but most buyers think the stairs are "dangerous" or "awkward-looking" and it really kills the saleability; I think buyers get turned off as soon as they see that damn staircase.
- House is a tad dated and well overdue for some TLC. This is part of the reason relations soured with prop manager, they did not tell me when work needed to be done. Hired a handyman who is fixing most of these issues (new paint, minor pluming issues, various lawnwork, etc) over the next couple of months.
- My current job pays very well, but employer sadly did not provide a relocation package nor a "buy-out" option to help with getting rid of my current property.
- I am 6000 miles away and am crazy-busy most of the time. I really don't have time to even think about this house - my poor father who is local has been having to do all the legwork for listing the property, repairs, etc.
- My understanding is that since I am no longer actively trying to rent it out, I can no longer get the tax write-off benefits of having rental property (e.g. all the money I'm losing is no longer tax-deductible). Please correct me if I'm wrong.

To the questions: House is listed with a reputable agent, but have had very little interest from buyers since listing (poss in part due to time of year?). Should I keep it on the market or go back to renting it out? Any other options I haven't considered???
posted by photo guy to Home & Garden (10 answers total) 1 user marked this as a favorite
Lower the price enough and it will sell. People were interested in the totally destroyed Detroit homes for $1. (Not that i'm suggesting going that low).

What you need to determine is what your carrying costs look like versus how much you want to get rid of the house. If you need it to sell for $X no matter what, then you need to hold out and get renters in the meantime. If you want it gone tomorrow, there ought to be a number that will make that happen.
posted by TheAdamist at 3:34 PM on December 13, 2013 [1 favorite]

Have you looked into how much it would cost to have the spiral staircase replaced? If it's the kind I'm imagining, it's awkward and dates the house. They tend to be difficult to baby-proof, which could be a problem if you're trying to sell in a neighborhood where young families are moving.
posted by The corpse in the library at 3:35 PM on December 13, 2013

It sure sounds like you should get out of the landlord business, so plan whatever you do around the idea that you will sell it soon. I think you should take your Realtor's advice as to how to accomplish that. I also think that a few weeks (in winter, no less!) on the market without lots of interest is fairly meaningless.

I seriously doubt the staircase is all that big a deal. If the house were otherwise nice and well-priced then an interested buyer wouldn't be stopped by an unusual staircase. But, if it looks dated and poorly maintained and if you've priced it unrealistically for what it currently is (as opposed to how you remember it) then you might need to make some combination of adjustments to the house and the price. Find a Realtor you feel you can trust, and take their advice.
posted by jon1270 at 3:38 PM on December 13, 2013 [1 favorite]

Do both. While you're waiting for it to sell, find a new property manager and tenant. Whichever happens first, run with it. Plus, since you're actively trying to rent it, you can get the tax write-off benefits.

Also, with it being run-down, it makes sense to put some TLC in whether you're selling or renting. That effort will make it more attractive to buyers and renters. Just do it in a cost-effective way.
posted by davejay at 3:39 PM on December 13, 2013 [1 favorite]

What about offering a mortgage yourself or rent-to-own for people that would love to buy but still have poor credit from the slump? You would have to have a lawyer vet it and be someone you were willing to believe would be able to pay.
posted by saucysault at 3:41 PM on December 13, 2013 [3 favorites]

I just sold a house and we're about to buy another.

Houses with old kitchens, outdated appliances, ugly paint and carpeting, etc will get passed over by a majority of buyers without a second glance. If you can afford to update, you might find that you'll get more interest and a better price.
posted by gnutron at 4:39 PM on December 13, 2013

If you can stomach managing it for a few more years, then you should rent and hold.

Prices are just beginning to turn up after a historically low in the market. If you sell now, you are selling very near the bottom of the market. And you know, you should buy low, not sell low.

There is every indication that the real estate market is heating back up. In fact, there is evidence of another bubble brewing. I guarantee that in 4 or 5 years from now, the house will be worth considerably more.
posted by Flood at 6:50 PM on December 13, 2013

Have you considered renting it out with explicit permission to futz with it? Or with the idea that if the renter can over-see some of the minor renovations, that you'll pay for them? I'm someone who is nowhere close to owning a home, but I looooove home renovation projects and would kill for the chance to do some/observe some, or be allowed to paint or hang up pictures, etc. This might be a little more out there than you're looking for, but I wonder if there's a home-design blogger or up-and-coming DIY-er in that area who'd happily rent a home and fix it up if they could blog about the process, and have a certain amount of free reign. That could make the house however much more desirable in even a year.
posted by Charity Garfein at 11:34 PM on December 13, 2013

Response by poster: Thanks all. I think the price is fine - the house was professionally appraised 1.5yrs ago as part of a refinancing, and the agent agrees with the price. Major renovations are out - I dont have the time or money.

Simultaneously finding another property manager is a good idea but I dont know where to start. Any ideas on how to quickly find a reputable company?
posted by photo guy at 12:02 AM on December 14, 2013

My house has been on the market for six months. I'm in a similar situation (good bones, new roof, but could use some aesthetic updates) so I feel your pain. Home buyers in all but the hottest neighborhoods are still being pretty picky. I'm considering dipping into savings to fix some things - it's annoying because I'd rather just negotiate over this stuff on final price, but if it's scaring people away from even making offers, it may be worth the money and hassle.

Regarding finding property managers, I don't like hearing that relations "soured" with your previous property manager. Relations shouldn't be a part of it - it's a business transaction. To find someone more professional, maybe check out members of professional property management associations? I work for IREM (Institute of Real Estate Management) and you can look up members here. Be sure to select the single family homes property type. There's also NARPM (National Association of Residential Property Managers) which is exclusively single family & condo property managers.
posted by misskaz at 6:55 AM on December 14, 2013

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