Level Up or Stay Put?

[Daniel T Stockman]

I have a question and it revolves around selling a property. Let me outline the situation:

- We purchased a property in 2021 for $245k and now we can sell it for $350k. We currently have a 2.99% interest rate.

- The property currently rents for $2,300/month & escrowed mortgage is $1,562/month. There is an HOA of ~$200/month. We also have a Property Manager who takes $195/per month (plus a lot of small fees/charges for minimal repairs).

- In theory, we COULD cashflow ~$538/month (without the PM), but in reality, we are only averaging ~$150-$200/month.

- If we were to sell today, we'd have ~$103k in hand (after realtor fees/closing/etc) to invest elsewhere.

Should we do one of the following?

1 - Keep the property and fire the PM? Thus increasing cashflow

2 - Sell the property, re-invest the ~$100k into multiple SFHs or a Multi? Thus increasing asset value & look to increase cashflow

3 - Do something else that we haven't thought of.

[Nathan Harden]

Hold onto it. That rate is equal to gold right now.

You don't want to sell it too soon, or else you will pay capital gains tax. So, fire the PM and self manage, save some money. Also, when you said "cashflow", you did not account for any repairs, maintenance or vacancies or CapEx. If you have added that much value in just a year, I know that you have done some work to it, but that doesn't mean to not plan for the future when expenses arise.

Look into a HELOC if you want some money to play with.