Single family home with low ROI, keep it or sell it

[Ed Martin]

Hello everybody. I would appreciate any advice whether its to keep the property or to sell it. I have a single family house that I currently rent out. The house was originally our primary house. We owned it clear and used the equity to build a new primary house. I consider the roi to be low based on the market value of the home. I will list the numbers:

current rent $1950/month (going to $2000 in about 6 months at end of 2 yr lease)

My expenses: annual taxes $7950 ($662/month)

                        Heloc balance $170k interest currently 5%

                        land lord policy $1150/ year

                        Self managed

                        Maintenance : has averaged $300-400 per year.

Reasons I am considering sale :   1) property is currently worth about $270k (making me feel roi is low).

                                                           2) property has a pool which is a liability that I'm not completely comfortable with.

                                                           3) property has a heloc balance against it of about $170k that I technically cannot deduct the interest                                                                       because it wasn't used for the property or any other rental.

                                                           4) Tax treatment: my understanding is if you sell it having lived in it 2 out of last 5 years the capital gains                                                                 would be exempt. 

If I sold it my plan would be to take proceeds and invest in multiple lower cost rentals that would probably bring a better return.

                                                                                                       Thanks