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Updated over 8 years ago, 06/01/2016
Sell or Keep my rental property?
Hey guys I need some help here. I own a rental property in Camino, California. I want some help here to see what you guys think, if I should sell my current rental and buy other with the money I would get or if I should keep it. Let me give you some numbers.
I owe 118k on the property. I just had it appraised last week at 189k. My payment monthly, which includes all taxes and insurance is $870.01. This house was completely renovated before I bought it. All new electrical, plumbing, Sheetrock, floors, roof, appliances, counters, cabinets and basically everything you can think of, so I basically have 0 monthly maintenance on it. The home is a 2 bed, 1 bath and also has a loft. I currently rent it for $1,200/month. I will probably raise rent to $1,250 after the current lease is up. What do you guys think? Should I sell and put that $70k in equity into two other houses? Or is this rental fairly well cash flowing? This is my first rental so I'm not super experienced. If I sold, I would have enough money to do 20% down on two other houses that I could use as rentals. Hope to get some good feedback from you experts out there. Thanks!
Just expressing my own thoughts, based on what I've heard over and over again... If you have a cash flowing property, why not lend against the equity to get the other properties? As long as those new rentals would also cash flow enough for you after paying for the equity loan. That is, if the plan would be to have many cash flowing properties. Just saying', why get rid of a good thing?
Not that your plan sounds bad.
Refinance it and get the equity out to invest in another property.Selling is stupid because you will waste money on taxes,closing costs,real estate commissions,etc.Your profit would drop to 40k at best.Leverage is normally the best option.
I'm in a similar situation. I'm going to turn my primary residence into a rental which will cash flow very well after all expenses. I also have over six figures in equity. I've tittered back and forth on selling or renting. I can't help but to think if I sell now the market may continue to go up and if I don't sell the value will go down. crazy..... Huh? Decisions, decisions, decision.... I'm leaning heavily towards taking the equity out and using it for my next rental investments. Thoughts?
thanks for all the info guys. I think I'm leaning more towards maybe pulling 40k equity out and putting that down toward my next rental house. Seems more logical and I will still be cash flowing on the property close to $200/month.
Are you able to find a lender who will cash you out at more than 70% LTV?
I'm dealing with a mortgage company right now so I'll have to ask my guy to see what he can do for me. I'm currently in the process of buying another primary residence with an FHA loan. So we will see.