Ninety days on the market. Cut 15k, or rent it for a year and relist
My first rental hasn't even closed yet, so I'm asking about someone else's problem that I've been shown the spreadsheet for. A builder I know has a finished four bedroom sitting at 90 days. Construction loan matures in five months. He can cut 15k and probably move it, or he can refinance into something longer, lease it for twelve months at a rent that covers most of the new payment, and try again next spring when rates may have eased a little.
The rent case leans on the idea that affordability improves as rates drift down and that the house sells for more in a better market, plus he collects a year of rent in the meantime. The cut case is that he's a builder, not a landlord, that a house lived in for a year sells as a used house with a tenant's wear on it, and that his capital and his attention are worth more on the next build than on this one.
What I can't figure out is how you'd even weigh a year of holding against 15k, since the holding costs and the refinance costs aren't small and the future price isn't knowable.
Finished spec, 90 days, loan maturing:
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