Gee, that is more a strategy question than anything else. What are you inclined to do? You are the one who has to live with whatever action you take.
Are you a long-term rent and hold guy? If so, you should hold.
There are a lot of factors to go into the decision, and you have given far too little information to make suggestions of what would be a good way to go.
Here are some of the considerations: Amount of equity in the property. Interest rate on the current loan. Interest rate you might expect on a refinance loan.
Value of the property. How much capital gains you might have if you sold. Whether you might want to keep investing in other real estate after you sold this–suggesting a 1031 exchange.
How much money you have on hand to do the work if you don’t refinance.
Countertops are cheap. Windows are probably expensive, as would be siding. I would not be inclined to put vinyl siding on myself. Maybe paint if it needs it. If I were short of money to pay for windows, I might do some, but not all now. I might put in on the side where winter winds blow and maybe where they are seen most, such as the front. OR the most deteriorated ones.
Posted by Robert Thompson on September 03, 2003 at 21:00:32:
hello, i have a ?.I own a duplex in VA.Mortgage is $950.00 with taxes and insurance.In addition I pay a third of the water and gas.That totals about $75.00 a month.rents are $600.00 per side.here is my problem.The duplex needs new windows now and the kitchens need new vinyl and countertops.In addition i have asbestos siding and would like to put vinyl over it.Should I fix up and refi,sell the property, or last should I tear the duplex down and build 2 new houses on the property and sell them.Any ideas would be helpful.Thanks BOB
Robert,
As Ron says, it depends on what you want to do. Do you enjoy being a landlord? Is there a very strong market for single family homes that would justify the expense of tearing down the old building and putting up new ones? Is it even possible to sub-divide the lot?
In the fix-up vein, in my area there is money available from the state, county, utility companies etc to make “energy conservation” improvements that include windows and siding (with added insulation underneath). Long term loans at low percentages, outright grants etc. May be something to explore in your area.
Also, with rates still relatively low, it still might be a good idea to refi just to improve your cash flow if you plan to hold for the long term.
All the best, Lyal