Primary residence turned rental: Hold and 1031 in future or sell

[Luke Massaro]

Hello All,

Long time lurker, first time poster.  I became a land lord in 2015 when I converted my primary residence into a rental property after living in the condo for two years. Property is located in Evergreen, CO and I am an out of state owner utilizing a local property manager.  I will continue to be an out of state owner/landlord for the foreseeable future.

The property has been rented out by the same tenant since the day I moved out. I am up against the 5 year window for capital gains exclusion in the first half of 2018 but realize the property has been a rental for 60% and primary residence for 40% so I can only exclude 40% of the gains from taxation.

The property is cash flow positive bringing in about $600/mo after mortgage, ins, taxes, hoa dues, and management fees.  It has been a great property and has appreciated in value nearly about $100k since I purchased the property in 2013. I owe $119k to the bank @ 3.83%.

I am looking for advice and opinions on what the BiggerPockets crowd would do in my situation: hold onto it, sell it before the 5 year window expires on capital gains exclusion, or keep it and 1031 exchange it at a later date but not have to worry about selling it before the 5 year window expires.

Thanks!