As the title states, I am contemplating the best move for this rental property and would appreciate any insights from experienced investors. I will try and provide as much detail as possible.

Property is located on the North West side of San Antonio by Shanefield and 1604 (Seaworld, Alamo Ranch) and was purchased back in 2015 for $150k. It served as a house hack as I lived in it for the first 3 years with roommates, therefore I will owe capital gains tax if I sell as I moved out about 5 years ago.

It has worked great as a rental, but I am considering selling as my tenants from the past two years just moved out, the appreciation and market rent have stabilized the past year and hasn’t seen an increase like we saw the past few years. Also, I am expecting capital expenditures may be coming up in the next few years as the home was built in 2006 and has the original roof and AC. I did replace the flooring throughout the home with a good quality vinyl plank in 2018, repainted the cabinets and added hardware, and updated some fixtures before moving out. Other than small repairs to the fence, stair rail, fixing blinds, lawn service, and doing a deep clean, the home is in good shape to make rent-ready for about $1k-$1.5k.

My last tenants rent was $1,785 and market rents are around that price. My PITI payment is $1,131.63 and I pay a property manager $147.50, leaving me with $505.87 each month ($6k per year) for maintenance, vacancy reserves, and some cash flow. I'd anticipate this cash flow with new tenants.

I anticipate the sales price to be about $270k-$280k selling the property as-is and about $300k or a little higher if I were to update the kitchen / bathrooms, roof, lawn, and AC. My mortgage balance is $130k and I anticipate about $15k for closing costs (Prorated taxes, title fees, Inspection repairs and 3% commission). I am a Realtor so would save that additional 3% commission as I would list the home. Therefore, I’d take home about $130k before taxes selling as-is and possibly $150k+ before taxes with a remodel.

My goals are to continue investing with buy-and-hold properties or to move into multifamily, so a 1031 exchange can be an option as well, but I haven’t identified a potential property at this point. If I take the tax hit I would use the money to stabilize my other two properties and use the rest as a down payment for a new investment property, possibly a syndication with other local investors.

So what would you all do in this scenario? Sell as-is? Rehab and sell? Or continue to rent with $6k yearly cash flow after PITI and PM (but expecting some capital expenditures soon)? Your responses are much appreciated!

San Antonio, Texas

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