Posted by Killer Joe on April 27, 2006 at 22:17:11:
Maria,
Even though the market is flooded, if your property is more desirable than a significant portion of the other properties you still may be able to find a buyer that wants your property. A desirable property at a reasonable price will always attract interest. The Phoenix area has historically been a yo-yo market for decades, mostly due to fickle CA buyers/investors.
When I was a kid in the fifties they would show newsreels of the rope handlers on blimps that held on for that one brief moment too long when the blimp suddenly went airborne. They went from possibly suffering a few broken bones from a short fall, to catastrophic failure when they could no longer hold on to the ropes at altitude.
Your blimp is about leave the ground. Can you hold on until it can try another landing? If not, let go now. HTH
Trying to keep this short, although there is alot to say. We bought outside of Phoenix more than a year ago, along with “many” other investors. Although I had misgivings about buying in an area where many other investors were also buying, apparently the area has appreciated since we bought. We were going to hold, and had not had a vacancy until now. We’re about to go into the third month of a vacancy - we’re long distance landlords like many we know, and have a PM company. I heard there are alot of homes on the MLS in the Phoenix area. Should we sell now and get out (even though the market is flooded) or wait it out? I hate to keep going through our reserves, but also don’t know how long it would take to sell if the market is flooded. Any advise is appreciated. This is our first investment property - we’re far from experts (as you can probably tell). We are not interested in being high rollers - we were just looking towards retirement and for help with college tuition, etc. We don’t necessarily need to get out now, but the vacancy is killing us. Any advise? Should I fire the PM and try to do a rent to own approach? We need to decide fast because we cannot keep going through our reserves.
Posted by J.D. Stewart on May 01, 2006 at 13:54:38:
What area of Phoenix? I have a RE Agent/PM there that is very good. I’m an out-of-state investor also, with plans to eventually move there. She had my first property rented the day of closing. When my second one wasn’t rented by closing, she had an open house the next weekend and had it rented. Not saying yours will be as easy. It all depends on the price.
Yes, the Phoenix market has a lot of inventory for sale, and rents are too cheap. I’m seeing $300K+ houses renting for $1300/month.
If you decide to sell to just get out of the market, let me know. I’d be interested at the right price.
You need to find out what your PM is doing to find a tenant. A friend of mine had a property near Phoenix that was vacant for 8 months. He hired a new property manager and got it rented almost immediately. That was several years ago, so I don’t what the rental market is like there now, so your PM may be doing everything they can. But you need to find out.
Also, you said the property has appreciated since you bought it. You need to find out what you can sell for now. As Killer Joe points out, you can always sell at the right price, in spite of the “flooded market.” Admittedly, a flooded market sounds bad, but what makes you think it’s not going to get worse? I would consider getting out now, especially since you’re a long-distance landlord and don’t have much experience.