Sell a great rental or continue renting?

[Aaron Eveland]

With this hot market it’s tempting to sell. I have a house/duplex in an incredible market that is a great rental that I never thought of selling. But seeing what a house sold for next door is causing me to reconsider. Rental brings in about $2,200 net income (P/I, utilities) not including cap Ex nor vacancy. However based off the numbers I am seeing of houses selling, I am sitting in about $450,000 gross profits off a selling it. Maybe upwards of $550k. Anyone got advice?

[Winston Covington]

Aaron, it depends on your goals. If you're younger and looking towards building up your portfolio, it might be time to sell and 1031 exchange your way into more property.  If you're older and since you really like the performance of this investment, you might consider using that positive cash flow to pay it off sooner.  What's more important, cash flow or appreciation ?