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Updated about 8 years ago,

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6
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0
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Robert Leardi
  • Shrewsbury, MA
0
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6
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negative cash flow but positive equity-sell or continue to rent?

Robert Leardi
  • Shrewsbury, MA
Posted

I have been following bigger pockets for approximately 6 months and the amount of useful information is amazing(could have really benefited from all this info 5 years ago) I currently have a rental(SFH) that I initially purchased as a starter home and eventually turned into a rental when my wife and I purchased our second home. The mortgage on the rental including taxes/insurance is 2000 a month with approx. 6 years left on the loan(rent is 1400 a month and tenant takes care of all utilities including landscape-shoveling.) When we first purchased the home we had a 30 yr loan but refinanced into a 15 year loan with the expectation that we would live in the home for the duration of the loan and own the home free and clear. As circumstances changed and we bought our second home we were stuck with a higher payment when we rented it out due to the refi down to a 15 year loan. Currently we owe slightly over 90k with the home being valued at 275-280k. The tenants who have been in the home have been there for almost 4 years and have been as close to ideal as u could hope for(always pay on time+take care of property with zero unreasonable requests) The tug of war in my mind is do I continue to pay out of pocket (have enough reserves to continue to do so) and own the property free and clear with significant cash flow in 5-6 years OR sell. Another important factor to consider is that I'm in the final stages of a heloc on the rental property in order to gain access to cash so that when an opportunity presents itself I can act and do things the right way(positive cash flow) because I'm well aware that this has not been something I would do again(wish I would have started with a multi on an FHA but I cant go back. Fortunately I have not been faced with any major repairs and no vacancy. Thanks and looking forward to hearing some thoughts. .

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