1st world problems today. I own 2 properties in CO. One is a condo that used to belong to my wife before we married. It's actually a decent source of positive rental income. The other is the house we lived in when we moved to Seattle. We weren't in a position to sell it when I moved here and the market didn't help much. We've had it rented the entire time and the second tenants have been in it now for around 2.5 years. Nice family, pay their rent on the time, are the occasional pain but, really, pretty damn easy as far as tenants go. The rent doesn't cover all my expenses and I make too much to claim rental income losses as deductions, so while I am building equity equal to the negative delta, I'm still upside down from a cash flow perspective.
Anyway, the Colorado market has skyrocketed. My wife's best friend who is a successful realtor, says the average days on market in our neighborhood is 3 days and she threw a listing number at us that was pretty shocking - about 15% higher than what we could have gotten over the last couple of years. Of course, the house has been a rental for the last 3.5 years and while it's in decent shape, it needs paint and cosmetic touch ups to get it into selling shape.
We started discussing with the tenants to see if they would be interested in buying and we'd cut them a deal to do it without realtors, yada yada yada. Turns out they are pregnant with their 3rd kid and don't think they are in a position to buy (likely credit issues that are almost off their record). He wants to talk about possible rent to own or even paying more rent to just let them stay.
Of course, were the situation reversed and they had an opportunity to move that suited their interests, they wouldn't think twice about how that affected us, but nonetheless, I still feel bad. My biggest worry is that I feel like we are currently in a sweet spot with a hot market and low rates and my spider sense tells me now is the time to unload the house. Rent to Own is an option but I would only do it with a $100 rent increase plus they'd need to come up with $200 mo on a 30 month agreement with a $5000 option fee and I don't know if they'd be able to come up with that money. It would also likely delay my ability to buy a house here in Seattle for at least a year and a half to two years.
The only way it makes sense for me to just keep renting is to raise the rent $250/mo and that still leaves us dealing with the property, potentially losing out on the opportunity to sell at the right time and not buying a place here for the same amount of time.
Am I a #### for following my own self interests here?