Quote:
Originally Posted by AmbitiousSaver
I guess the next thing I need to tackle is the rental... (I'm still hesitant on the minivan... but baby steps)... if we sold the rental the HELOC would be gone too. But when I last talked to the realtor about selling, it would take $22K to sell and that is if we got our asking price. It could probably go for $250-$275K and we owe $226K on the first mortgage (we pay $1695/mo with taxes/PITI/insurance/etc)... well and then another $255/mo on the HELOC. Plus $20/mo on HOA fees, and $152.50 on the property manager. And we only charge $1525/mo in rent cause that is what the market is for the neighborhood and the house.
We have good credit so I don't want to mess it up on a short sale or anything... but don't know what to do... hence, we've kept the rental and just got by. I have a feeling if we got rid of the rental and even broke even we'd be a LOT better off just by doing that.
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Honestly I would not worry about your credit score. You are in way too much debt as it is and do not need to be borrowing anything. If you can get out of the rental with a short sale consider yourself lucky. The way I read it you are losing $600 every month! And that is without setting anything aside for maintenance or vacancy! Adding future repairs and lost income due to vacancy you may be talking about $10K a year losses on this property.
Right now you owe $250K on the house. It sounds like you might be able to get that or slightly more if you got asking price. So I'm not sure how you are arriving at $22K in the red, even after commission. You should consider getting another opinion from a different realtor.
It is definitely a tough situation as you are selling near the bottom of the market. So there is no great solution. But you have to ask yourself, would you rather be $22K in debt with a ding on your credit score, or $250K in debt and losing $10K a year on your investment. I know it is very hard to let go of the college strategy but I think you have to admit it is not working.