To sell, or not to sell?

[David Hughes]

Hello,

Need a little advice as I’m still inexperienced in real estate investing. My wife and I took the backdoor to real estate investing and currently have only one investment property in the DC area. We’ve been holding off on selling the house because we bought in 2008 (fortunately after the market was already on its way down) and have been renting it out for the past five years (we moved across the country to Oregon). For first two years we were operating at a loss, now, after one refinance, we’re breaking even (though on our taxes we see a nice loss because of depreciation).

The question is: do I refinance again and keep the house and start making a profit, or do I sell it (1031 exchange maybe?) and wait to find a great deal locally?

The refinance would bring in an additional $200/month, or we could cash out for about $40K.