I have made a good faith effort to keep up my mortgage payments on a condo that I no longer live in since Oct 2005. In 2005 I had to move out of state for my job and I listed the property for about 60 days before realizing that there was not enough interest in the market to sell it at a reasonable price. The property is now appraised on the market at just under $300,000 while I am paying on a $330,000 interest-only 7/1 ARM loan. It is supposed to reset in April 2011.
Fortunately, I have a good property management company that has been able to keep the condo occupied by a tenant under lease for almost every month since moving in 2005. On the other hand, I have been losing anywhere between $700 - $1000 out of pocket each month because the rent doesn't cover my cash flow. This is really starting to add up and I am building a fear that I will not be able to hold onto the property long enough for the market value to recover.
It's one thing to keep paying the mortgage, knowing that one day, it will be worth more than I paid for it. It's another thing to keep paying my mortgage, with the chance that my condo might not reach the price I paid for it before the ARM resets. I have lost approximately $42,000 due to this negative cash flow over 50 months.
So, here is my question: Is there anything else I can do in this situation to minimize my out-of-pocket losses going forward?