Condo in downtown Bellevue. Keep it or sell it
I am considering moving out of my condo and move to a larger place. I can get a new mortgage for a larger place without having to sell my current condo. However, I don't know what to do with it. I have a 3 br condo in downtown Bellevue. 1000+ sq feet. Worth about 800k. Older building build around 2000-2005. I think it could be rented for about 3000. Hoa is 600, mortgage 2400 At that price I can almost break even. (Loss may be between 20 and 250 dollars a month). I am considering holding because of all the Amazon people moving to Bellevue maybe it will go up in value. However with so many new condos coming up it may be hard to compete too. Another option is sell it. After all the fees I would probably end up with a bit over 300k. I could either use that money to buy in full another property with no HOA and rent it or just invest it in something else (stocks, bonds, index fund, etc.) Thoughts? Advice? We have lived in the condo for more than 2 years.
RE is all about the (un)holy trifecta Net income Appreciation Depreciation At break even rental you still have 2 of 3 (and that ain’t bad). Minor nitpick: For me, I always do a 10 month occupancy calc (FNM rules) and not 12 months, so you are actually negative cash flow.
Can you elaborate? How can you have appreciation and depreciation at the same time?
Appreciation-real estate generally appreciates. The rate at which it does differs greatly by area. Depreciation - Uncle Sam and Aunty IRiS reward you for capital property put in service of making money. So, every year you get to deduct a portion of the cost of your property as a depreciation. This is of course on top of any Section-179 recapture and not subject to the 10k SALT tax limit. Why you ask? Who the fuck knows. Never look a gift horse in the mouth, tho.
How close is it to light rail station? Seattle is turning into a shitshow and construction of retail and office buildings is booming, I’d expect in the 5 years more companies will either move completely to Bellevue or open sizable Offices in the area. +the school districts are better. Imo, keep it.
Half a mile. around 10 minutes walking. It's close to the library. What about the large HOA and all those new massive high rises. Wouldn't supply outpace demand?
Massive high rises are super expensive if you want a larger condo and have ridiculously high hoa, upwards of $800 for the last tiny studio I checked. I guess it depends on what you get for that hoa
Rent it out. You should work with a tax guy to get the most out of it. I think you can deduct your time up to a small limit. If you think the near term (1-5 years) rate of increasing population is close to your or exceeds your mortgage interest rate, then I would seriously consider keeping it and renting it out. Then, in a few years you can sell it at a nice gain that you can use to pay down your new mortgage (for the house you’re buying now). Good luck.
That's a very interesting rule of thumb. Rate of increasing population in Bellevue is 5.1% , mortgage interest rate is 3.85% Thanks!
Rent it for 3500 at minimum.
I somehow find it unlikely to get 3500. I may give it a shot before selling though
Why unlikely, you set the price lol.