Very tough decision. Reminds me of the situation many condo owners in Houston and Dallas found themselves in during the late 80's real estate bust in Texas. I remember situations where reporters we wanted to hire couldn't take the job because they would have to declare personal bankruptcy in order to leave their Houston condo. Similarly, some of our reporters wrote hefty checks in order to sell their Dallas condos and take a new position in the Washington bureau.
Here are your choices as I understand them:
1) Get closure and take an immediate loss of $35,000 by selling to an investor for $50,000.
2) Take a chance and hold the property, vacant, for sale. Taking an eventual loss of about $10,000 plus holding costs. (This assumes you sell for about $81,000.) outlays while holding. If it takes 12 months, that would be another $14,400, for a total of $24,400.)
3) Rent the condo through a management company and lose $230 a month plus vacancy time. That would involve a loss of about $4,000 a year ($2,760 in monthly shortfall. if rented plus one month vacant. The loss, of course, could be greater if vacancy and repair expenses are higher. Even so, it would be more than 8 years before your total loss would exceed what you will lose immediately by selling to the investors.
During that 8 years you would have a tax deduction in the amount of the loss plus depreciation. Depending on your income you might also be able to continue making contributions to your 401k and you MIGHT benefit from some increase in rentals and condo values.
If the immediate sale loss was smaller, I would be tempted to take it and have done with it. But it is very large. So I would think seriously about holding the condo and accepting the monthly cash flow drain, knowing that it was no larger than a payment for an inexpensive car. That's easy for me to say, of course, since I don't know your income, credit card debt, or commitments you've made in your new location.
Good luck.
Scott
