Keep duplex forever or sell?

[Nate K.]

Hi--I'm new here and am looking for some real estate investor advice. My wife and I bought a duplex 7 years ago at the top of the market for $365000. We planned on moving out in a year or so, but then the market dropped out and here we still are. For the last few years, we have figured that it might be best to save a down payment for our own single family house, and then just keep the duplex for some retirement income (we are 35 now). We rent the top floor for $1400 and we could probably get more next time around, as well as for the floor we currently live in. The trouble is that it has been difficult to save the down payment, and now I am wondering if it would be better just to try and sell the place if we could come out with enough for a down payment and move on with our lives.

But my question for you all is this place a good investment? We are on an ARM and a 2nd mortgage, and the plan was to refinance to a fixed mortgage this year. If we were to move out and still own, the rent would cover all expenses and maintenance to the point of breaking even, but it would be very tight. My thought was that it would be great just to hang on to it until it is payed off, but maybe these numbers don't add up to make this a very good plan? Any thoughts or advice on what determines whether one should keep and invest in a place vs. dump it and move? I'd very much appreciate the input!