Keep or Sell Investment Property

[Andrew Mac]

Hi everyone, been following BP for quite some time now but just made an account and wanted to get your opinions on the situation I find myself in.

I closed on a property in the Coachella Valley about a month ago, paying $450K with the intention of using it as an AirBnB rental on a part-time basis. Like many other markets, the inventory in CV has dropped to all-time lows, and, as of right now, I have the option of reselling this property for more, netting around $100K after cap gains/fees/etc.

The other option is to let in a long-term tenant right now at around $3,000 per month. We had to close the property extremely quickly, so I am currently in the process of refinancing to get a lower rate. If the refinancing goes through, the property should cashflow around $1K/month. 

My dilemma is made worse by the fact that there is nearly no inventory in this market with favorable short-term rental specs (no HOA, no land lease, no rental restrictions from the city, etc.), and this property fits them all. What would your recommendations be in this situation? Should I take the cash and invest somewhere else or keep the property and use it as a long-term investment? Your advice is greatly appreciated!

[Mark Futalan]

@Andrew Mac

What part of the CV did you purchase at? I have 2 vacation rentals in La Quinta. As you mentioned, the area is a hot market right now for investors and 2nd home owners as people are taking advantage of the low rates and trying to buy more affordable housing. As far as options, there are many. Not sure if you got an STR permit already, but rentals have been busy lately with local demand. Renting mid term to folks is another option as I see demand for that as well since folks can work remotely nowadays.