Understand Your Position

Are you upside down on your real estate holdings?  Then unless you have the cash to bring to closing to make up the difference you might want to stay put.

See, here’s the deal, if you purchased an investment property and the value has dropped you’ve only “lost money” if you sell it.  If you purchased that property and the montly rent is paying the mortgage, taxes and insurance plus any miscellaneous/reasonable expenses then you should keep that property.  Keep renting it until the market turns.  When will that be?   I don’t know.  But why would you want to lock in a loss?

I’ve seen so many houses that purchased at prices available today are a steal compared to a few years ago.  And in Johnson County, Kansas the rental market is strong.  Real strong.  I’ve had property managers tell me there simply are not enough 3 bedroom, 2 bath houses for rent. 

It’s unlikely JoCo will get hammered the way some areas have.  There are foreclosures in Johnson County, to be sure.  But the ratio is favorable to the real estate owner and investor.

2 Comments

Filed under Personal Real Estate Opinions

2 responses to “Understand Your Position

  1. Chris, An investor friend of mine (speaking at the MAREI EXPO in OP on the 12th of October by the way) suggested “dollar cost averaging”

    His idea is that you own 1234 Main street that is renting and covering it’s costs, but you might owe a little more on it than market value.

    You then find that 1236 Main Street might be for sale at a much lower price. Buy this one and make a much better cash flow on this one to offset the just break even status on 1234.

    Do this several times in a year at our really low prices and then in a few years when values go back up, you will be sitting pretty again.

    Over time, the average price of all your units will make you money – just like they teach people who invest so much a month into their retirment account.

    I hope that makes sense. . .

  2. There are so many ways to look at this. Thanks, Kim. Your input is always welcome.

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