Are you in a situation where you are having to hold onto a property in Little Rock and its costing you unnecessary money? Each day that goes by more money is coming out of your pocket and into the property cost. Instead if continuing to spend money on the property you may want to consider selling your Little Rock house! In this article, we will go over how much holding cost in Little Rock may be costing you.
Most investors and rehabbers will tell you that holding cost is a big factor in their cost analysis. The faster they finish a project the less money they will spend. Simply put – if you own real estate it will cost you money. If you own a property and it is not generating money for you then you have a problem. If your Little Rock house is bleeding money from you, it might be time you consider selling it!
Costs of Holding A Property In Little Rock
As long as you still own your house you will be responsible for paying the property taxes. As soon as you sell your house you will no longer be responsible for those taxes.
Utilities are required to keep the basic functions of the house up and running. This can include things like the electricity, water, sewer, trash services, internet, and other monthly cost. If you don’t live in the house you will still need to pay the majority of these utility cost. The cost of these can differ depending on the age of the home. Houses that have older mechanicals and electrical equipment normally will have higher cost.
Maintenance & Repairs
A good rule of thumb for maintenance costs is the one percent rule. This rule says that you should put aside 1% of your purchase price and plan to use that on maintenance cost throughout a calendar year. To put this into perspective, if you purchase a $100,000 house then you should have $1,000 put aside for the maintenance cost each year. This is just a common rule of thumb to protect you form any unforeseen issues with maintenance and it is not guaranteed that your cost will be 1% of your purchase price each year.
You will need to look at your current insurance or get a quote on homeowners insurance. Our research shows that homeowners insurance will cost you on average $1,000 annually for a Little Rock house.
The biggest cost of them all is the mortgage. Especially if you have no living in the home or renting it out. Mortgage payments can be well over $1,000/month and can really take a good chunk of change out of your pocket over a period of time.
What else could you be doing with the money you have tied up in the house? You could very well be missing out on a better home or investment opportunity. Look around at what else is out there and decide if you are truly happy with your current situation. If your property isn’t doing anything for you, it might be time to find something new!
As you can see, selling your home now as opposed to later can help you keep more money in your pocket. For every day you continue to own it, you will also continue having to be financially responsible for it. The bills and maintenance costs add up quickly. Run the numbers for yourself and make the decision that makes the most sense for you!