Do you have San Bernardino real estate you’re holding on to but aren’t sure why? If so, consider that each day that goes by, you owe more and more on the property. Before you lose another pile of cash consider the following: it may be time to sell the property.
Holding property as an Investor
If you’re an investor or landlord or just happen to own some property, you know full well the costs of owning real estate. As professional home investors and ‘flippers’, we can tell you the quickest way to higher earnings is by selling as quickly as possible.
When Emotional Ties are Involved
If you have no emotional ties to the home this will be less of an easier decision to make. If you’re holding on to the home for sentimental reasons i.e. The family home, then you would do well to consider how much longer you can afford to spend on a home you may not use or is already costing your livelihood.
How the Pros do it
Real estate professionals understand that in order to own multiple homes, each home must bring in a value that is above the cost to maintain the home.
And this isn't always easy.
For example, a Rental Property should bring in a monthly income that reduces the monthly mortgage on a home, allowing the owners to profit from the monthly income.
If your home isn’t doing this, you’re in trouble...
If your home is NOT bringing in cashflow that is more than the cost of the home, it is not serving your best interest. If you intend on keeping the home, the property needs to be working for you and generating an income.
If it isn’t it’s only going to drain yours.
If your San Bernardino house isn’t doing this it might be time to sell the home.
The Costs of Holding San Bernardino Property
First, the mortgage.
Is it paid off?
If not, how are you planning to pay it off?
Paying for one mortgage is often enough headache so having 2 can be a real struggle.
Coming up with the additional cash for a home you’re not living in, don’t intend on living in and is just sitting is taking away from you and your family.
This can go two ways.
- Either the home has been sitting without any utilities running, falling apart by the day,
- Or, you’re still paying some sort of Monthly utilities depending on your situation.
If you are paying, add up the costs for what you’re paying monthly.
Now, multiply that by what you’d pay for the full year.
You might be surprised to find out how high that number is.
If so, ask yourself: “What else could I do with that money?”
Maintenance & Repairs
Ah! Maintenance & repairs!
For some properties, no matter what something always seem to go wrong that requires more and more money.
‘Money Pits’ as they’re called are often a good rule of thumb that the home is draining you of your soul. If you’re dealing with ridiculous maintenance costs, or the home is in need of dire repair, cleaning - you name it - then selling is often worth not have to deal with the headache.
Assuming this isn’t your case. And your home is well maintained and taken care of, the home is STILL going to costs you upwards of $2,500 each year (if you purchased for $250,000) on home maintenance alone.
You should be noticing now that with a mortgage, utilities and maintenance/repairs you’re already paying an arm and a leg.
But we’re not done yet!
Good ol’ property taxes. Everyone’s favorite thing in the world! We all know taxes are a sham but we still have to deal with them anyways. Having said that, property taxes can be outrageous.
That’s how the cookie crumbles!
With recent tax code changes, deductible property taxes have taken a hit.
Seeing as this is an unavoidable reality, if your name is on the home you will be responsible for the property taxes.
This is one reason that makes selling the home very attractive as it removes your obligation immediately.
Insurance. Need it. Gotta have it. You never know what can happen so it’s best to stay protected. Even if you’re not living in the home. Having a proper homeowners insurance policy is just good practice. Unfortunately, these costs are going to vary based on your location. We could suggest to expect an average of $1000 to be paid annually to have this.
The cost of your livelihood
If you own a home that’s costing you anything, you’re losing. Even if the home is inherited and as a sentiment to your family you wish to hold on to the home. But consider how your family would feel if they knew their parting gift to you was causing turmoil in your life? I doubt they would approve!
If your home isn’t serving you or bringing in a monthly income it may be time to consider selling the home so you can finally move on with your life. You never know where the freedom you’ll open up will lead you and allow you to go or what other investment opportunities you can use the proceeds for.
At the end of the day you will have to run the numbers yourself to estimate how much your home is costing you, and where it’s time to draw the line so the decision serves what’s best for you and your family.