Sell a “good” rental?

[Nick Wehrley]

I have a long distance SFH that cashflows about 500-600/mo on paper and have owned it for 3 years. This thing should be a machine but the PM always seems have something come up that causes me to not cashflow. I've been negative for the past 6 months.

- Previous tenet skipped out on last months rent
- There was a turnover but that only took a month. 
- New tenet fees 

- Small toilet leak (should’ve barely changed things)

After those bullet points, no explanation for low cashflow. 
This was originally meant to be a flip but decided to keep it before looking into PMs and there aren’t many options. When is it time to call it a day and sell a property that should be killing it, but just isn’t? 
I'll still come out with a good profit, but to sell a, sometimes, high cash flowing SFH with a 3.75% rate also seems crazy.
TIA!

[Rick Albert]

I have been struggling with PMs as well. I would consider looking for a new property manager to see if you can lower your costs and explain what your problems are. 

From my experience, most property managers charge the following:

-6%-10% of the gross rents

-Cost of turnover

-Mark up on all repairs

-Costs to renew leases

Could you self manage? Even though many PMs charge 10% of the gross rents, it really comes out to about 15%-18%. 

In terms of selling, it really comes down to what will you do with the cash from the sale.

1. Is there a better property to reinvest in? Maybe multifamily makes more sense to spread out the risks. Having a vacancy in a house is 100% empty versus a vacancy in a fourplex is 25% vacancy.

2. Keep the money, get taxed on it, and do whatever you want. Not ideal but everyone has a different story.