How to calculate cash flow on this property? Hold or sell?

[Pranshu Adavadkar]

Hi there, Here is my situation. As an accidental landlord since 2010 ( couldn't sell) I am deciding between to sell or hold. I bought this townhouse for $280 with FHA loan. Outstanding balance 220k. Biweekly mortgage ( P, interest,tax) $850, association fee $200/mo. Rent 2080/mo. On an average repair 2000/year. Agent fee 1 month rent. On an average 2 year lease. Now, the question is what is my cash flow? The property is at really great location, right next to train station and suburb downtown. No problem renting. If I decide to sell, I think I may get $260-280k. And if I continue to rent, rent will increase at least 100/mo each year. I am not sure if I should sell it or hold it. What you guys think and why?

[Amanda G.]

Monthly income= $2080

PIT+HOA = $1050

Repairs = $167 (2000/12)

Agent fee = $173 (2080/12)

Cash flow per month= $690

You didn't tell us how much your down payment was. If you want the Cash on Cash return = (annual cash flow)/(amount of cash spent to buy)

The question is can you do better than your current returns if you sold the place and used the cash elsewhere? Remember, selling is going to trigger sales expenses, and potentially taxes, so figure that in your decision.