Should I sell or continue to rent out?

[Martin Min]

Hello, BP community, I am currently renting out two properties in San Jose, as follows:

1: Town house, 450K purchase in 2016, currently sale price: $600K.

     Expenses: 

        property tax: $6891.68

        interest: $16009.17; 

        Insurance: $695

        Repair: $400

     Rents: $2500 * 12 = $30K

The rent just covers the expenses, with a $6000 positive cash flow

2. SFH, 650K purchase price in 2017, and current sale price: $870K

Expenses:

property tax: $9226.2

interest: $19022.42;

Insurance: $617

Repair: $300

Rents: $3400 * 12 = $40800

The cash flow of this is nearly $10K.

I am thinking about whether I should sell them for a profit. Or it makes more sense to continue renting.

I am almost a newbie and any thoughts or suggestions would be highly appreciated! 

[Jason D.]

I think the most obvious point to make is that your cash flow isnt what it seems.....

Theres no accounting for vacancy, maintenance, or capex.

Your return on equity is very low, so you are losing a ton in opportunity cost.

That being said, it depends on what you would do with the money if you sold. If you would simply buy more low return properties, I would keep doing what you're doing.

If your intention would be to scale, possibly in a different market, I would sell in a heartbeat. You could make twice the cashflow (or more) in most other areas of the country with the equity you have tied up.