Keep or Sell - interesting year so far...

[Alan Hicks]

I have a 3/1, rental house. Purchase price was $125k ( mortgaged ) and has been fully rented for 4 years.

My only cost was the $25k down.

In February, tenants had a house fire. No fire damage. Only smoke.

I am 1/2 way through the renovation.

Insurance, 3rd party contractor, fire/smoke mediator assessed $125k in damage. I have a contractor walking me through the renovations and will be re-inspected and new COA issued after repairs. Again, no fire damage, just light smoke.

I took that cash and paid the mortgage off ($80k) and will use $45k for the repairs.

ARV is $225k. Rent is $1500/month. Taxes/insurance are $300/month. So I would clear around $1200/month.

Big ticket items are new (roof, water heater, hvac, septic was pumped in January before fire ).
I also have 6-month emergency fund (based on the old mortgage ($962*12 = $11,544).

Of all of the podcasts, YouTube pro's, DR, etc, etc etc.. it's a dream to have a paid off house.
Now that I have one, seems strange.

Keep or Sell?

Keep = Net Income = $14,400 per year

Sell. Invest at 5% = $11,250 per year

Sell. Pay off Rental #2 and some debt = cash flow increases by $760/month ($9120 per year ) and I have 0 debt other than primary house.

I do not think this house will appreciate any further. It's a 3/1, 900sqft.

Thoughts ?