I'm teetering on the fence if I should sell one of my properties and wanted input from the experts:

The facts:

Purchase price in 2010: $80,000

Capital improvements during ownership: $44,000

Mortgage payment: $520

Monthly rental income: Currently $1200 ($950 lifetime avg)

Price of comps: $160,000

Balance of Loan: $56,000

Additional Info:

Age of HVAC system: 10 years

Age of roof: 15-20 years

Age of water heater: 12 years

With these figures and information, would it be advisable to sell or would you hold? I sold a near identical property in the same area 4 years ago for $125,000.

I'm assuming the list of aged items would be about $10,000 to $20,000 to replace in total?

Given the facts, if you could buy something that rents similar for $100,000 investment then yes.

However, none of the reasons to sell are listed. Is it in a nice neighborhood? Is it hard/easy to rent, is the neighborhood improving or declining? Does it have a less than ideal floorplan, small closets, small kitchen, etc? Are property taxes and insurance an issue or is insurance included with the mortgage? Is it far away from your home or other rent houses?

How do you feel about that house? Is it convenient? Do you want to keep it? Could you buy a nicer home with the proceeds with a smaller or no loan? Could you use the proceeds to pay off the other houses making them more profitable?

So you put around $24K down then spent $44K to fix it up. Your outlay totals around $68K.

Your rent is $1200 a month less $520 in mortgage payments -- meaning your gross profit is around $8,000 per year.

This does not include taxes, insurance or repairs.

At this rate in 8 to 10 years your property will be paid off, and your monthly income will DOUBLE.

Having reviewed these numbers, you are on a short road to success. Having in income property PAID OFF and producing great positive cash flow is Key to having Equity and Income.

Unless the property had huge deferred maintenance and the neighborhood is changing for the worst, unless you are cash poor and property rich, I wouldn't see...

..... I wouldn't sell unless you want to do a 1031 tax free exchange into a larger property with more potential.

It looks like you will need $10-$12K in repairs over the next 3-5 years. I'd keep it unless it was my worst house, or if it was old (1930-1950s), or didn't fit your growth model (less C class houses and more B class houses).

Can you sell it and buy two other newer houses with the proceeds? Like put $50K down on two houses and get two new mortgages? How's that cash flow for you?

My latest bad / annoying thing is 1960s Ranches that need a new sewer line because they were all cast iron. That poop is expensive.

Jason, if you are in the build up phase of your career, sell and redeploy those funds into a property that returns a higher yield.

But, if you are near the finish line, fewer units of higher quality may be desired . If this is the case, you may as well hold.

I think you have to look at the reasons you want to sell. If you want to/

(Or can) buy a property with a better ROI. Or if for tax reasons it makes sense, or say it’s a problem property that attracts problem tenants.

Look at it from all angles, tax repercussions, long-term holding vs selling and buying better yield. I feel like if you have a property you know... you know it’s quirks, repairs that have been done, what the neighborhood is like, the neighbors, etc... I tend to hold unless, of course I see better opportunities.

Also think about if you could refi- cash out, and at a lower interest rate, the cash-out money is tax-free.

But of course if you just want “out” and want to use the cash to buy a boat/summer home/travel... That’s a good reason to sell!

Also, if you’re thinking about selling there must be a reason. Look inside yourself and pin that down. Then look at the motivation to sell, analyse it and decide if it’s a good reason to sell. Then you’ll be making a justifiable decision that you’ll be happy with.

As an aside: I write two columns on a sheet of paper and put at

The motivation for the sale is two-fold: I feel like we're at the top of the market and that things are going to go downhill after the covid foreclosures hit. Also, I was recently freed from my job. I have enough reserves to cover any unknown maintenance for my properties and I've always lived off of the rental income anyways. So not having a second income stream isn't a big deal-I just need something to do.

Because I don't have a 9-5, I can't see myself being able to get another mortgage (and I'm alright with that). I was thinking of selling so I could use the proceeds to pick up a cheap property on the courthouse steps.

I'm in my early 40's an would like to continue to build my real estate portfolio, but don't have enough cash on hand to buy my next property outright yet.