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Updated over 3 years ago on . Most recent reply

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James Dillard
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Rental 2 of 5 years lived in, sell before 5th or hold on?

James Dillard
Posted

I have a property that I lived in almost 3 years ago before I started renting it out. If I don't sell before the end of the year I will have to pay capital gains taxes. I bought the property for 165000 and I currently owe around 120k on a 30-year loan. I could sell today for 300000 - 315000. My monthly cost is 1250.00 and it is currently rented at 1900. The rent is under market and I should be getting closer to 2300 a month. I can't raise the rent due to the California eviction moratorium/ rent freeze but that's a story for a different post. My tenants are great and always pay on time and the unit is in excellent condition. I also pay a property manager 10% because my 9-5 requires that I work outside of the U.S. for extended periods of time. So after everything, the property brings in around 460 a month which is nice.

This is my first venture into real estate investing and my future goal is to have more properties. I am currently considering purchasing another residential rental property. I have a lot of options but I'm unsure of the Best path forward. I could sell and possibly buy a few more properties. I could refinance at a higher interest rate for a down payment on a second rental. I could refinance my primary residence at a lower rate and go that route. 

I really don't want to sell, but I think that may stem from an emotional attachment. I'm curious to see what others would do if they were in my situation.
 

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