I never intend to sell my rentals when I buy them. Will I? Sure. I just don't intend to in the beginning.

The time to sell depends on your goals and on your ability to execute them. Perhaps you can elaborate on them.

So Ken, you're selling right now? :)

Class C (and B and A and I suppose D) is a term that I think may have been coined on the website. It is basically a way to rate your property and the tenants that are likely to rent that property from you.

What does for you as an investor is help you to understand what materials to furnish your apartment with. class C would be clean and functional. White, possibly used appliances that may or may not be newer. Class A is stainless steel appliances and dishwashers. Class A you might actually put in hardwood flooring, class C you might paint plywood or use VCT tiles. Class A you might put 2” faux wood blinds, class C the cheapest mini blind you can find.

A 1031 exchange is a swap of one property for another of "like kind" where any profit (if any) is invested in the new asset.

Taxes are deferred not avoided.

There is no "one size fits all" answer to this question.

Never buy an investment without an exit strategy. My exit strategy as of today is dying. I plan to keep the units until they pass into my estate and on to my heirs. Why? Because I think income property remains one of the best ways to produce and perpetuate multi-generational wealth and leave a legacy. Here's why.

Stepped-up Basis. Google that term and read everything about it. Then read it again. Let is soak into your veins.

Here's a quick and oversimplified example...

Person A buys a house for $100,000. 10 years later, he sells it for $200,000. The profit is $100,000. He will pay taxes on the capital "gain" of $100,000, which will be somewhere between 15-20% under tax laws today. $15,000 - $20,000 goes to the tax man. In addition, he'd have to pay 25% taxes on the recaptured depreciation, which after 10 years and no capital improvement modifications to the basis result in another $5000 - $6000 in taxes. Ouch! Person A basically LOSES about 1/3 of the value of his profit, when all the house value did was keep up with inflation. That stinks! Capital gains should be adjusted for inflation, but they are not.

But....Person B does the same thing EXCEPT after 10 years he dies and leaves the property to his heirs. At the time of death, the heirs of Person B hire an appraiser who says the property is now worth $200,000. If they sell that house for $200K anytime within 6 months of inheriting title they pay no capital gains tax and no depreciation recapture. Uncle Sam gets nothing! Even if they hang onto it and sell it a few years later later for $250,000...the heirs only pay taxes on a $50,000 capital gain vs. $150,000 gain from the price at which Person B bought it.

This is the miracle of stepped-up basis. An asset's basis value gets reassessed at the time it is inherited and it resets to current market value.

Breathe that in for awhile and meditate on it.

So if your grandpa had a house he bought/built for $5,000 back in 1950 and today it's worth $500,000 and you inherit it, you can sell it immediately and pay NO TAXES. See how this is a multi-generational wealth building tool?

My kids will have a choice to either be land lords and keep the cash train running, or sell and get a nice chunk of change tax free!

Some people may say they don't intend to pass anything on to the next generation. That's fine. If you want to cash out and enjoy the fruits of your labor, more power to ya! But I think this is an excellent way to change the trajectory of a family tree by leaving a powerful wealth-building legacy. Even if one doesn't have children or chooses not to leave an inheritance for the kids, you can still leave the asset to a charity of your choice and they will get the same benefit.

Around 35 plus years ago I purchased a number of single family homes. Average purchase price $80,000. I sold some along the way to buy more homes, duplex, triplex, fourplex, 5 unit, 8 unit, etc.

After 5 years I sold one for $118,000. After a 8 year hold I got $196,000. After 10 years I sold one for $250,000. The longer I held the property the more profit I made.