Am I on the right track?

[Matthew Morgan]

Upon moving to St. Louis last year, I converted my small, one-family home in GA into a rental. Since it's paid off, it brings in about $400.00/mo. in free cash flow. Including renovation costs, I paid $50K for it, and that's about what it's worth now. Should I keep it as my first rental in a portfolio?

I moved to St. Louis last year to marry my wife, who also owns a rental. She recently refinanced the mortgage on it and owes about 60K on a 30-yr. She brings in just enough rent to cover all expenses. A few years ago, she tried to sell it, but with no luck. Should we keep this house as a rental and increase the rent?

Thanks in advance for your suggestions.

[Brandon Sturgill]

@Matthew Morgan General rule of thumb...never sell a rental property...unless it makes more sense to cash out then to continue to gain the benefits of rental real estate...

The only complication I see on your end is the distance...but that isn't necessarily a bad thing. Remember why we invest in real estate:

1) Debt pay-down (your tenant will eventually pay off your mortgage...and you can accelerate this by paying more toward principal)

2) Equity buildup (you are the benefactor of the equity in the property and can use it to buy more property)

3) Tax (the IRS is pretty good to us as property owners :)

4) Because we love to provide safe, clean, and reasonably affordable places for folks to live.