Sell For Capital Or Hold (Circumstantial)

[Zach Bright]

Hello everyone!

I currently own a single rental which cashflows nicely and is in a great area, but trying to decide if I should sell it due to my current circumstance. It is in relatively good shape for being built in 1923, but will soon (~5 years) need a new roof, still has cast iron piping, and original clay tile/drainage. All very costly items if something were to go wrong and being nearly 100 years old that could be at any time.

After educating myself and making a plan on how I want to proceed with purchasing rentals in the near future I feel like this rental is not to the standard of what I want to own from now on and does not fit my future buying criteria.

I lived in the house for 2 years as my personal home, and then rented it for 2 more. So I am technically within the 5 year selling window and shouldn't have to pay capital gains taxes if I sell the home (unless I'm misunderstanding the law Taxpayer Relief Act of 1997). 

After Running comps I believe after the sale is all said and done I'd profit roughly $40k.

I would have considered doing a Cash Out Refinance, but due to my ignorance a year ago I did a rate refinance. So tapping into my equity in the property seems to be a challenge.

Where I'm caught up is, I want to own rentals that I know WILL last (preferably BRRRR) and this is one way for me to gather a financial cushion, BUT I already own it and know everything about the property.

It has updated electric, brand new water heater, new furnace, new AC and fresh new glazed bath tub, but could use some cosmetic work around the property.

If you were in my situation and this was your only rental would you let it go and start new or hold it?

Thanks!