Thinking about selling my Frisco Texas rental

[Ben H.]

Hello All It has been awhile since I have last posted. I have been taking my real estate classes and slated to take the state exam in January. The driver for me taking the courses is to educate myself about the business as well as being able to keep part of the sales commission when I do decide to sell. Which leads me into why I am posting this. I currently have 4 rental properties. Two of which I am full owner and the other two I am 50% owner. I financed all of them. I currently own a Townhome I purchased new and was my first home I bought back in 2002. When I moved out of it about 4 years ago, my wife and I purchased a larger home to start a family. The real estate market in Texas has gone gangbusters and the inventory of homes is starting to build. As of November 2016, we have 3 months of inventory. I believe last year we were at only one or two months of inventory. They teach you in RE class that 6 months of inventory is typically considered a balanced market. They also say that it does not stay there and will overshoot creating a buyers market. I have built enough equity in my townhome that if I sold it, I could pay off my primary residence which is very appealing to me for various reasons. If I did decide to sell, my thought was to wait until we get 5 months of inventory and put it on the market. As it is a starter home, I don't think it will go down much in value in Frisco. They are not building anything less than $350k. However, I think we may be through the bulk of the price increases and can't see it going up much more. Currently I would value the townhome around $250k. When I asked one of my professors when do you know when to sell, he said when you stop seeing cranes building. I don't know that I want to take that chance and lose out of paying off my mortgage if the property vales do go down. My question is would you sell and pay off your mortgage or ride out the next down cycle. Tia Ben