Help analyzing unexpected offer to sell rental

[Chad Vermillion]

Looking for some advice/thoughts on how to analyze the decision on if I should sell a rental property.  Long story short - my tenant contacted me wanting to know if I would be interesting in selling the property.  The reason I am hesitant is that I know the current value of the house is less than I paid for it.  The details of the property:

- Purchased in 2008 for $235K (primary residence)

- Estimated value now; $200-205K

- I have $200K on the mortgage

- Rent covers mortgage, taxes, insurance, and property management - I have a positive cash flow of $35 each much assuming there are no maintenance fees.

- Potential large costs of keeping it as a rental... it will most likely need a new roof in the next five years and possibly a new AC/heater and a replacement carpet if the tenant vacates. 

If I keep it I have the chance to allow some equity to build back up; My opportunity cost of keeping it I see as low as I do not have the equity to pull out and invest elsewhere - However if I sell it i avoid potential out of pocket repair costs.

Any advice on how you would look at the deal? My long term goal is to buy and hold properties, This property was not purchased with that in mind... Do I look at the lost equity as its valued now as sunk cost?  Thoughts? Thanks so much!