Hold Or Sell Rented Flip?

[Peggy Munson]

After sitting on the market longer than my co-flipper and I would have liked, we ended up renting our flip-and-sell single family in February of 2020.  We had learned after it sat for too long that we'd made some mistakes that really had to do with the tiny lot, lack of basement, and other items beyond our control, and this is what made the house hard to sell in that lukewarm housing market.  

Everyone knows what happened after Feb.  Even though we had flipped the house will the full intention of selling -- with a pretty elaborate reno and replacing most big-ticket items -- we ended up with a great tenant and a stable income stream when the stock market crashed, the economy tanked, and the pandemic got serious.  The tenant impressed us throughout, and having a stable tenant with a steady income stream made us grateful, even after the housing market suddenly got so active. The tenant was aware at the time that we wouldn't necessarily rent beyond a year, but wants to stay for now, but likely won't stay indefinitely.  Now that the real estate market went from cold to super-hot and the lease passed one year, our realtor is of course saying sell.  

We have every confidence the house would be easy to sell right now, and that we'd turn the profit we originally hoped for, but we also got attached to the passive income stream; we just might want to replicate that scenario in a property that we actually flip as a future rental, versus flipping for resale.  Given this is an older house that won't be sellable in a not-hot market, and will likely have issues down the line relating to its age, should we strike while the iron is hot and sell now, take profits, and plan our next flip more cautiously, or should we continue renting given the stable tenant and good rents in the area?

I know this is not a question anyone can fully answer, but it would help to hear why people chose to ultimately flip-and-hold versus flip-and-sell.