West Chester, PA · Member since 2016 · 3 posts · 0 votes
Hi, I own one investment property that I currently rent out. I have rented the property for the past two years and am curious if it is time to sell. I would like some advice on the matter or possibly a good calculator to use to help assess my options. I can answer any questions regarding to the property or any mortgage questions you may need.
This is more of a personal decision. Keep it if you can, but if you need money now sell it. Your situation is going to carry more weight than property or mortgage information.
I agree with Nick that it ends up being a personal decision. However, I have a few questions:
What is your motivation for selling? Is the property cash flowing nicely? Will there be deferred maintenance expenses in the near future (roof, HVAC, etc)? If you sell, can you take advantage of tax advantages (no capital gains if you lived there 2 out of past 5 years)?
Todd: I do not have a specific motivation other than having more cash on hand to possibly get another property. The cash flow is 16% of the mortgage. The house is new construction so no major maintenance. After another year I will be outside of the 5 years.
Matthew Burns I'm not sure what 16% of mortgage means with respect to cash flow, but it appears your main motivation may be to avoid capital gains taxes IF the property has appreciated a lot. If appreciation is low, then selling a cash-flowing property is a tougher call that you will need to consider with input from a tax consultant.
One other option if you need cash for the next property is to refinance if you have equity in the property. Be careful with this because it would likely result in a higher mortgage payment and a negative cash flow or razor thin margins so that you can't afford even modest repairs.