Hold & Rent or Sell Now?

[Graham Mink]

Hello,

I am on the fence on what to do with one of the properties I own.

I own a SFH that I used to live in and I currently rent it out. I am locked in to a 30 year fixed rate loan at 3.875%. The property cash flows about $200 a month, but this does not set anything aside for capital improvements. I totally renovated the house in 2008 so I don't expect to need any major repairs in the near future.

Part of me wants to hold onto the house since it is in great shape, and I have a great loan. Another part wants to sell it and take the $50k I would net out and use it to buy a 4+ unit property that will generate more cash flow.

What would you do?

Are there any benefits to owning SFH over MFH other than easier resale?

Anything else I should consider?

Thank you for your time!

Graham Mink

[David Krulac]

@Graham Mink

easier than resale....lots of components to that, more buyers, not bought on cash flow, probably sell to O/O, less expenses, less appliances, I could go on.

If you don't do a Section 1031, uncle will take some of that $50K, if you're in the highest tax bracket that bite could be 44% just Fed no counting state.

One alternative would be to get a second mortgage if there is equity above the first that you can borrow. The 20% equity that they'll require you to keep in the property would be less than the tax bite.

Without knowing all the details, I'm lean to keep.