Should we sell or hold?

[Julia Green]

Hi Everyone, I know this is a frequently asked question but our situation is a big unique.  

We bought a cool condo in the Boston area almost 3 years ago.  We just moved out of it and are trying to figure out whether to hold it as a rental or sell it.  It's a cool space with lots of character which means it may not be for everyone.  1 bedroom /1 bath loft space.  

The issue is that it is non-conforming so the only financing option is an ARM with 20% down from one local lender.

Currently it generates $2500/month cashflow via AirBNB and will generate $1000/month cashflow with new longterm tenant.  

If we sell within 3 years we get to avoid capital gains taxes and walk away with modest appreciation. If we hold, we get good appreciation and interim cashflow but the property becomes more challenging to sell because of rising downpayment  and interest rates.

It's a very unique property so we think it will take a while to find an interested and qualified buyer. Our other fear is all the trapped equity. If we keep this and pay it off it is unlikely we could do a cashout refi or a HELOC (yes we have researched this and the answer is no), but it would cashflow $2000-$3000/month.

What would you do?

[Craig Curelop]

@Julia Green - Having a property in Boston that cash flows $1,000 to $2,500 a month?! That seems like a great asset to have. I'd hold onto it as long as you can. 

Boston is a coastal city that will likely fluctuate quite a bit. As long as you can hold on through the downturns, which it seems like you can, I see no reason why you would sell it unless you want to invest in something bigger?