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Updated over 3 years ago, 05/20/2021
Would you sell or continue to hold?
Ok its no secret this is primarily a sellers market that we're in and I need to know if I should sell or continue to hold.
Details:
3/2.5 and 2 car garage, 1956 sq ft. in Cypress, Texas.
Purchased in 2016 for $176k, 3.25xxxx%
Currently owe $150,xxx
In a master planned community/the 'suburbs'. Currently cash flows $175 a month once I account for HOA fees ($1100 a year) & home warranty ($550 a year). And I am priced VERY low compared to other rentals since the renter is a family friend and handles most repairs, etc.
Like most areas (if not ALL) the market is CRAZY! 2 streets over from my property a house is under contract after 24 hours for $11k over asking price. Listed at $244k and is under contract for $255k and appraised for total offer price. The home is not what you would look at and think 'updated' or remodeled, has half bath less and 100 sq ft less than mine. 1 long street over from me a different house is under contract for over asking price as well, not sure by how much. Listed at $247k and went over. This house has upgrades that were very well done and has 4 bedrooms vs my 3 bedrooms, overall I think the buyers got a GREAT deal. Point is I can likely walk away with $80-$90k as is.
Million dollar question: should I sell or hold?
Just in the 5 years since I have purchased a whole new shopping center and movie theater has opened within less than 2 miles. Also less than 2 miles on the other side of the freeway they are clearing land to build a brand new master community. There are also plans to build the 'bullet train' from Houston to Dallas and we will be very close to one of those stations. The area is growing exponentially.
IF I sold I would likely hold the money in hopes of things returning to a more level playing field for buyers. I luckily wouldnt NEED to buy again right away since I have a second home already. Would then invest in either 2 SFH's or 1 SFH and 1 STR. BUT I also think of the fact that my mortgage is pretty dang low, apartments go for more than my mortgage! Is that safety net something I am willing to part with? Am I going to screw myself by getting rid of my investment or is now the time? Am I going to sell and regret it later due to buttloads of missed appreciation? Then theres the whole tax issue...how long can I sit on the profit for 1031? I initially planned to hold this property forever but I also dont want to miss out on opportunities by not adapting. Ultimate goal is to have at least 5 properties and/or $5k a month in cash flow...sooner rather than later but definitely by retirement in 20 years.
Now that I have rambled on - what would YOU do?