Looking for a 1031 Exchange Strategy for a rental held too long.

[Buddy Holmes]

I have had my first rental too long. I admit I have this thing for it: 1000' to a great beach, my dream retirement home, a super long term tenant, a super appreciation.   But from a return on equity it is well out of balance. In terms of the 1% rule, it is now 0.3%. In terms of depreciation I've used 22 of the 27.5 years.   How about some ideas for a good exit strategy?

[Bill B.]

Fixing ROE is easy, cash out refi. Are you saying you’re making money @ 0.3% rule? If so, great, another nail in the 1% “rule”. (I don’t think I have a 1% property in my portfolio that cashflows like crazy and has appreciated 300% in the last 7-10 years. It just isn’t important.)

If you’re not making money, obviously sell. if you are, you don’t sell unless you’re cash-poor and can’t qualify for a cash out refi. Or you are super desperate to trade a good stress free performing investment for the “opportunity” to try to make a better investment, that hopefully will perform better and yet not make your life worse. 

I get it, successfully real estate investing is SUPER boring. I’ve been desperate to sell any one of my properties so I could do something, anything. But as I’ve posted before, my worst property cashflows a little over $1,000/mo and I spend maybe 2 hours a year dealing with it. My tenants stay 4-12 (so far) years and only reach out when an appliance breaks. You get to the point where dealing with a PITA tenant or property just isn’t worth a couple hundred more dollars per month.