Sell or Hold? Cold Feet, Need Advice...
Hey everyone,
This is my first post, though I've been reading this blog, MMM, and Afford Anything for a quite a while now.
Here's the situation: I purchased a lovely property in south Harlem when I was 24, lived there a couple of years, moved away and have been renting it out ever since. I make a profit of $900/mos after expenses on this unit and expect to make $1000/mos starting in Aug. A broker who lives in my building has been after me to sell. He knows someone who wants my unit. If I sell now, I'd make a profit of ~$240k after expenses. This is tempting as I really want to buy another investment property or two and need additional capital to do so. The $100k investment I'm eyeing would yield about $3k/mos in rental income after expenses. I'd put the remaining $140k into other investments.
I'm very tempted to sell/cash out now to pursue these other investments, BUT the area in Harlem where the rental in question is located is still vastly under-valued relative to the rest of Manhattan. There is a possibility that if I hold onto the place for another 5-10 years that I could make $400-800k in profit...sounds crazy but totally realistic if uptown values ever get closer to downtown ones. It's a really amazing location that is just starting to perk up. But, the unit has several appliances on it's last leg, HOA/maintenance could go up significantly, and/or the area could stagnate or decline if there is another big market crash. I'm also bending building rental rules, so there is always a risk that they will force me to stop renting my unit (unlikely after 9 years, but a possibility)
My question: Do I sell now (tho still well below market value for Manhattan), take my $240,000 profit and secure the other properties that I know will be solid cash cows now OR hold onto this investment property until Harlem catches up (hopefully) to the rest of the market - which could be another 10 years but $400+ in profit?
Would greatly appreciate any input/wisdom!