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getting married

my fiance and I both own a condo... one is a 2 bdrm that is underwater by about $50k and the other is a 1 bdrm that is closer to break even.  all attempts to restructure the underwater mortgage through the fed. programs have been rejected.  we are debating if we should rent or sell the 1 bdrm and live in the 2 bdrm hoping the value increases before selling it in 1-2 years to by a house together.
  • February 19 2013 - Washington
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Answers (4)

Do you want to be a landlord?  Find a good agent to get the details on what it takes.  It may or may not be for you.  If you can come close to your mortgage, taxes, insurance, and expenses with your rental income, who cares if the market value to sell has declined in the last few years?  One of the best investments could be letting someone else pay your mortgage for you.  It could be worth something significant some day.

Of course, the property needs to be in good shape and maintained as a long term investment.

If you can't claim a hardship to quaify for a short sale and you can't afford to cover the loss if you sell short of what your mortgage is, consider living in the smaller unit and get all the rent you can for the larger unit until the market dictates something better. 

Good luck, I hope you can find the right solution.

  • February 22 2013
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Consider the following: Rent - Total Payment with Taxes & HOA = Balance or No Balance. 

If there is a balance then question is that is it worth paying that for next 15-30 years (balance of mortgage) or should you just walk away and take a hit to your credit.
  • February 20 2013
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Profile picture for blub blub blub
"To answer it generally...anytime is a good time to sell"

Please.

"And what would be the final return, once you two decide to sell it, could be break even?"

Um wouldn't that be better than a short sale or taking a loss?  Again...please.

A lot depends on what the market is doing in your area.  If it still declining, then maybe you will have to just cut your losses before getting in deeper in debt.

If the market is stable or improving slightly, then maybe trying to rent out the 1 bedroom to cover the mortgage would be the way to go.  Depends on what the rental market is like in your area.

If you can make the payments on the 2 bedroom, then you could continue living there and watch the market.  If it shows improvement over the next 6 months or so, then you will have a better idea of where the market is heading and make your decision based on that. 
  • February 20 2013
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There's many unknowns in your question.  To answer it generally...anytime is a good time to sell.  Are the condos in a great location?  What's the current inventory, how many other (like) condo's are presently on the market, in that area?  Would a Short Sale be the right answer?  Unless your in a strong rebounding real estate market, I strongly suggest that you think of this as a business discussion. I know homeownership is very emotional state whether your buying or selling, BUT, in the long run you have to be smart. If the rental covers the expense (PITI & HOA dues) then your not digging yourself into a hole, but if it doesn't...how long are the two of you going to "invest" your income into it?  And what would be the final return, once you two decide to sell it, could be break even?   
  • February 20 2013
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