Sell Property or Continue Renting

[Dan Geffen]

Hello BP,

I own a property in Long Branch, NJ that I purchased for $120,000 in 2018. The property is now worth closer to $190,000 and I am having hard time deciding if I should sell or hold. I am fairly certain over time appreciation will continue, however since taxes have increased the cash flow has gone from $250 a month to $140 a month. The $140 is after I increase the rent in November from $1,375 to $1,425. Since the market has gotten crazy I was thinking it might be a good time to cash in. If I do sell I am concerned I am leaving more appreciation on the table. With the money I receive I plan on reinvesting and growing my portfolio. I know I could always refinance to pull money out, but I think it would create negative cash flow. 

I appreciate any suggestions you can offer!

[Jody Sperling]

As long as you are cash-flow-positive on the property, it would be smart to keep it. 1) The taxes on the property might have increased, but what tax advantages does it give you end of year that selling it will take away? 2) Refinancing is often the worst--but most-talked-about way to get cash out of the property; apply instead for a HELOC. 3) Use the HELOC money to purchase another investment property.

Best of luck, whatever you choose to do!