Keep or Sell SFR in California?

[Aaron Bry]

Hi guys. I purchased a 3 bed, 2 bath SFR in Sacramento, California (Elk Grove area) in March of 2016. I joined BP a few months back and have been learning a lot and lately have been questioning my decision to buy this home. It is my primary for now, my idea was to begin renting it out, but after learning more and running numbers it won't be cash flow positive for 2-4 years. Lesson learned. On the positive side, I am paying less monthly here than I did for my apartment (I only own 50% of the home, so $800 monthly) but I am not nearly as close to work and now spend roughly $150 monthly to commute. My older brother, with whom I purchased the home 50/50 with, is open to the idea of selling.

Purchase Price: 270K

Loan Amount: 256K

Rental Prices: $1500-1800 in my area, depending on quality of home.

Monthly Mortgage: $1600 (PITI)

Current Home Value: $293,000 (I ran comps - house down the street with same exact floor plan sold for $290k last month, but they do not have new flooring, upgraded appliances, remodeled bathrooms, or a new stamped and colored patio in the backyard like I do)

What does BP think? Should I keep it as my primary and take longer to invest elsewhere (maybe when the market is more favorable?) or cash in and run?

[Gabriel Ugarte]

You haven't owned the property long enough to avoid capital gains tax. That alone would keep me from selling with that little of equity. You also have to subtract out commission on the sale making your gains even smaller.