What would you do? Sell or Hold?

[David H.]

First off, I want to say how grateful for BiggerPockets and all the invaluable information the forums provide.

I currently am experiencing a dilemma with my first duplex property that I currently owner occupy but will be moving out of to house hack a second duplex in same market.

Would you sell? Or would you hold?

Location: Portland, Maine

Duplex with 6 beds 2 baths (3 each)

Purchase date: 05/01/2015

Purchase price: $265,000

Reno costs: $35k

% Down: %10

Morgage Balance: $216,988

Morgage Rate: 3.65%

Monthly payment (P&I,T,I): $1,556

Rental income from first floor: $1,950 utilities included except for electric and internet

Monthly expenses est.: $500

Estimated rent for 2nd floor (owners unit): $1950

Total estimated rent: $3,900 monthly

Total estimated expenses: $500 monthly

I currently have a $107,000 HELOC on this property

The property appraised by the bank at $383,000 for the HELOC. Comps in the market would place this conservatively at $400,000

My inclination is to hold as the rental income is great. My fear with selling is I will not have as good of an opportunity to sink the money into right away that would match the income from this property.

The condition of this property is quite good and a lot of updates have been made over the 4 years I’ve owned it. I do have some large expenses coming up in the next few years such as replacing the oil boiler with a gas boiler (the basement floods a increasingly and the oil boiler is oddly the lowest point intentionally) and the roof is probably 5 years out maybe a little longer.

I’m grateful to be in this position and honestly got very fortunate with how the cards rolled out on this one. I’ve been able to run a very successful Airbnb out of this property and collect rents I could have never imagined at first. That being said, I believe the market is at its peak and selling now would net a 4 year gain that I could redeploy elsewhere, especially while I can take advantage of the capital gains savings as this was my primary residence for over 2 of the last 5 years.

Any suggestions would be greatly appreciated! Thank you in advance!

[Mike Dymski]

Put the figures above in your deal analyzer (using current market value) and compare the future returns to other opportunities (also run through the analyzer).  The numbers will speak for themselves.

Be sure to include the Sec 121 exclusion in your analysis (tax free sale of a primary residence).