Howdy y'all. Cross posting this in B&I too for the most traction. A little back story here, I bought my first home in March 2024 for $300k with $15k down (5% down). At the time, it appraised for $315k. I was house hacking it and renting out the other 2 rooms to buddies. Planned to be there for a while, but life happened and recently got married and moved 3 hours away. My monthly payment is currently $2,588 (PITI, PMI). I am now renting all 3 rooms bringing in $2,600 a month, so barely cash flow positive. The leases all end at the end of July 2026. I will owe $278k on the house by then. Zillow currently shows a zestimate of $296k. Additionally, if I rented the entire house, not by the room, rental comps would have it right around $2,000 a month.

I am beginning to contemplate what to do with the house come July/August. Do we list it on the market and sell it? Given the current real estate market, I'm afraid it would sit for a while and/or sell for less than I bought it for, and after closing costs, I would be in the red or at best walk away with no money. I don't feel like I could rent the entire house for anywhere close to the monthly payment. Do I keep trying to rent by the room and up the rent for each room to build in some more cash flow? The downside to this is navigating the dynamics of 2-3 random people living together. Do I try to furnish it more and turn it into a mid term rental? I don't think it's in an ideal location for this.

All in all, just wanted to paint the picture of the situation and get some older Ags' advice on options or what they would do. Appreciate any thoughts and help, and happy to answer other questions if I'm forgetting any info. Thanks!

Are they not renewing?

How is the condition of the home if it were to be shown for lease or for sale right now?

2 of the 3 are for sure not renewing. Haven't talked to the 3rd guy yet, trying to figure out what we're going to do with the house first before having the conversation with him.

House is in pretty good condition. Exterior is in good shape, only thing potentially needed would be flower bed work for curb appeal. Interior probably needs a good cleaning. If listing, I imagine it would maybe need to be staged with decor better than 'single guy decor'. Kitchen could use some updating. The fridge and dish washer are new, stove and microwave are old. Countertops are pretty ugly and dated. Interior could use some paint.

First of all you are not breaking even. You have not factored in maintenance and repairs(guaranteed to go higher with a rando renter). So you are cash flow negative, at least on paper.

Second do not use Zillow for market value. They are dead last in my research for data points.

Third being remote and a first time landlord you need onsight management. That costs anywhere 5-10% of gross rent. Again negative cash flow. If you stayed in town you could manage yourself but that is not the case.

So find a Realtor who knows your market. If that was the one you used to buy fine. Have them do a market analysis to get a real time value with recent comps. Should be at no cost.

Estimate around 6-8% closing costs and net that out for what you can take from the closing table. See if you can walk away even. If you can, sell. If you can't get close to even, or worse take a bath, then consider renting to get back to break even.

Good luck.

SteveBott said:

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First of all you are not breaking even. You have not factored in maintenance and repairs(guaranteed to go higher with a rando renter). So you are cash flow negative, at least on paper.

Second do not use Zillow for market value. They are dead last in my research for data points.

Third being remote and a first time landlord you need onsight management. That costs anywhere 5-10% of gross rent. Again negative cash flow. If you stayed in town you could manage yourself but that is not the case.

So find a Realtor who knows your market. If that was the one you used to buy fine. Have them do a market analysis to get a real time value with recent comps. Should be at no cost.

Estimate around 6-8% closing costs and net that out for what you can take from the closing table. See if you can walk away even. If you can, sell. If you can't get close to even, or worse take a bath, then consider renting to get back to break even.

Good luck.

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OP... negotiate that 6%-8% commission. Those numbers are for the ignorant. Just hire an attorney and save THOUSANDS. The days of 6% commissions are over. That's old news. Matter of facct... read the news. You'll see what's happened in that world, lol.

6%. There's your bath, lol.

If I were you I would sell it. Losing $10-20k on this is not the end of the world and will be Pennie's on the dollar compared to your emotional well being. Renting per room sounds like a nightmare. Take it from someone who did just that with our house in college and a current landlord.

Good luck and I promise you this is not a bad loss.

You need to nail down what it will actually sell for.

You can always list it for sale and rent at the same time at prices that test the market and go with whichever happens first.

We do full service buyer and seller representation across Texas for just 1.5%. Contact info is in my profile. Shoot me a text and let's set up a time to talk.

JamesPShelley said:

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SteveBott said:

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First of all you are not breaking even. You have not factored in maintenance and repairs(guaranteed to go higher with a rando renter). So you are cash flow negative, at least on paper.

Second do not use Zillow for market value. They are dead last in my research for data points.

Third being remote and a first time landlord you need onsight management. That costs anywhere 5-10% of gross rent. Again negative cash flow. If you stayed in town you could manage yourself but that is not the case.

So find a Realtor who knows your market. If that was the one you used to buy fine. Have them do a market analysis to get a real time value with recent comps. Should be at no cost.

Estimate around 6-8% closing costs and net that out for what you can take from the closing table. See if you can walk away even. If you can, sell. If you can't get close to even, or worse take a bath, then consider renting to get back to break even.

Good luck.

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OP... negotiate that 6%-8% commission. Those numbers are for the ignorant. Just hire an attorney and save THOUSANDS. The days of 6% commissions are over. That's old news. Matter of facct... read the news. You'll see what's happened in that world, lol.

6%. There's your bath, lol.

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Yes, pay someone from an even bigger vulture profession, someone who doesn't care about the real estate nature of your transaction, and someone who is doing the equivalent of rewording a resume when you consider that all real estate forms are available for free online.