Should I sell it or continually rent it?

[Rong Liu]

Hi, Everyone,

This is my first post here, please advise if I should sell now or keep renting.

My rental townhouse is in south San Jose. I lived there for 5 years before I rented it out. Now it is about 2.5 years after I moved out. I bought it for $280k, and currently it's worth $520k, and monthly rent is about $3200-3300. I have $180k mortgage left, it is on the 4th year of the 15yr term, with a fixed interest rate 2.5%. My monthly PITIH is about $2200 and I manage it myself as it is not far from me.

If I sell it now, I can take advantage of capital gain tax free allowance, and get ~$300k cash in hand. I don't know where to invest it though.

Or, just keep renting it out, and in 10 years it will be paid off and generate me $2500-3000/month cash. 

Any suggestions please?

Best regards,

Rose

[Account Closed]

I was in the same position and always say if you dont need the cash and can hold for over 5 years, you should never sell Bay Area property. And whatever you do , dont sell a Bay Area property and invest the money in cheap out of state homes. I own both and will tell you from experience that holding a Bay Area property will generate wealth in huge multiples of any out of state investment. Thats not to say my OOS properties have not generated positive returns. Yes they have. But I did it as an experiment with a small initial investment. And my equity in Bay properties is 10X that of the OOS properties. You have a great rental yeild on your purchase price. Why on earth would you give up that plus appreciation?