Keep or sell a Las Vegas property?

[Michael H.]

I have a property in Henderson, LV I purchased about 5 years ago. Cost 187k (put 37k down). Currently getting $1150 for rent, which is at least $150 below what it should be. My property manager lives there so they only charge me 5%.

I'm considering selling the property which is now worth somewhere around $260k and use the money to purchase 3 other properties and start my snowball strategy. My other option is to hold on to the property and just up the rent to fair market price. I feel like holding on to the property is like leaving $120k in the bank and not working for me.

Any advice would be appreciated.

[James Ma]

Whenever I hear people thinking of selling a property, the decision should come down to the ROI of keeping the property vs the opportunity cost ROI. If you sell the LV property and purchase 3 new properties, are you expecting a higher rate of return than keeping the LV property and refinancing to leverage the equity?

Selling to buy new properties has a lot of costs involved with realtors, titles and capital gains taxes (variable depending where you live) so that should all factor into your opportunity cost ROI calculations.