Should I sell my breakeven rental?

[Jim Piety]

I purchased a fixer upper through a wholesaler in March 2021. After more repairs and expenses than expected, i could not sell the house for a profit. The house would not appraise. So instead, I refinanced, pulled out ~50% of my invested capital and rented it out. Since September, it has been breaking even. If it was located in a fast appreciating neighborhood, I’d be okay with the zero cashflow. However, I am thinking it is a better play to sell, get back most of my capital, suffer a small/minimal loss, and reinvest the cash into a different, faster appreciating market. 

Are there any other options I should I be considering? Should I sell or hold? Appreciate everyone’s advice!

[Michael Gansberg]

@Jim Piety - sorry to be a downer, but it appears that repairs are not included in the calculation of cash flow. Repairs can be more than you expect(especially if you expect them to be zero.) If the vacancy rate is 8%, then you'll likely be looking for a new tenant every year or so. Which means turning the place over annually(clean, paint, maybe carpets/flooring, etc.) So I think your cashflow picture is optimistic. 

Selling the place carries more expense than you may be thinking- paying a realtor, closing costs, attorney's fees, taxes(I don't know what that stuff runs in TX, but it's non-negligible in NY.) So I don't think you'll walk with nearly as much capital as you're hoping to walk with. 

Trading stocks is much lower friction than trading real estate. Selling one stock to buy another can be OK if you're only a little right. If you want to pull your capital out of this deal with the idea of favoring another deal/location, you have to be very right. Even in the best of circumstances, it's difficult to know that area X will appreciate slowly(or not at all,) and area Y will appreciate rapidly. I know I haven't given you much advice, but hopefully I've given you some food for thought. Hope it works out,

Michael