To sell now (November 2022) or try to rent it out?

[Shane Benson]

Hey Guys! 

College student here, graduating December '22 (2 months from now) I will be relocating from Lubbock, TX to DFW area in January (with girlfriend getting a job there, I don't have one lined up yet) 

I have 3 properties total, 2 stabilized rentals, and one larger house that was supposed to be a flip, and I ended up moving into it instead. 

Now I am faced with if i should try to keep the bigger house as a high end rental ($2,500 per month with my market average rent around $1,500) or sell it. 

1. Sell: if I sold, would probably list under market value at 280k projected to NET 60k. I am worried with rates skyrocketing if I can even sell it at that price.

2. Rent: Would love to hold a hopefully appreciating asset in a great neighborhood, but may be hard to keep rented out as its not in a rental neighborhood and above the average price point 

Background that may be pertinent: This house is on a floating rate, 20 year note owe 200k. I have 2 roommates moving out in December (house hacking now) ARV is 300k, updated interior looks great, but have an unfinished basement, and the exterior needs new fascia.

Any help/opinions are greatly appreciated! Really tough decisions here for me. Thanks!

[Tony Aliatim]

Hi Shane,

First, well done as a college student already having a few assets under your belt. 

First question I would ask is, do you need the 60k that you would get after the sale? Also, there are tax considerations to take into account, have you held the property long enough to avoid capital gains? 

If you plan to sell the property, I would look into doing it sooner rather than later as interest rates will continue to rise and selling the property will become harder as the year continues. 

Have you explored selling the house and then using the money to buy two other properties, or even a MF? You could 1031 exchange and avoid paying taxes (you will need to pay the taxes down the road if you pull out the money). 

Otherwise, that high rent is an awesome cash flow opportunity which will be a great safety net as you look for a job.

Hope this helps!