My parents were kind enough to buy a house for me to live in while I was in school. All 3 of our names are on the deed to the house, but only my parents' names are on the mortgage. After I graduated college in 2003, I've been handling all of the issues with the house including making all of the payments. Since I've moved out of the town, I have continued to rent that house out to college students for the past several years. We've had the house for 10 years now and the mortgage is $1220. I've been able to rent it for $1600 for pretty much the whole time I haven't lived there, but I also pay the HOA and the water/trash bills. Plus, every time the tenants moved out, the place needed some MAJOR repairs before it was in good condition. (I also realize that those repairs are part of what got me into such debt!)
My current tenants are about to move out and I am debating between selling the house and finding some new renters.
My biggest considerations are if I sell the house, the profits could likely be entirely eaten up with taxes because of some issues my Dad had from his old business ownership days. I'm not sure how I would be affected since my name is not on the mortgage to the house. If I continue to rent the house out, I could keep lowering the principal, but what would be the point if I'll never come out ahead with the tax issue.
The other option would be for me to try to buy out my parents share of the house, so that I will own it completely and I won't have to worry taxes from them. I don't know exactly how that would work either.
I've met with a Realtor about selling the house and she's awesome and very optimistic about getting it sold quickly and for a higher amount than I had originally thought. (She is one of Dave Ramsey's ELPs) There are a few cosmetic updates we would need to make to the house before selling it, just to make sure we get top dollar, but thankfully it doesn't need any work that is too extensive.
I'm hoping that I'll be able to get this sorted out ASAP, since as of July 1st, the house will be not be bringing in any rent and I'll be paying the mortgage out of pocket.
Ask yourself if, in your current situation with your current goals, you would go to the bank and borrow the money to own this place. If not, then you shouldn't keep it. Imagine if you put in all this work, get almost to your goal, and something catastrophic and horribly expensive happens to the house.
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