Inheriting condo - Keep and rent or sell and reinvest?

[Edward Mills]

Hi There

Brand new to all of this. 

My brother and I will be inheriting a condo in Massachusetts and interested in getting thoughts on whether to keep it and rent it out or sell it and use the proceeds as seed money for potentially better cashflow investments. 

I'll be splitting everything with my brother (cashflow from rental or proceeds from sale). 

The condo would sell for approx $575k. There is no mortgage. It was purchased in 2015 for approx $440k so it has appreciated a fair bit. 
Rents on comparable units are $2500. 
Condo fee is $800/month (ouch!) 
Tax is approx $5500/year. 
It does not need any major upgrades at this time. Whether we keep or sell we will replace carpets in two rooms. That's about all it needs. 

So the cashflow if rented would be approx $15k/year. Remember that would be split between me and my brother. 

My question is would I/we be better off selling the condo and reinvesting that money in other properties that could generate better cash flow? 

I'm more interested in cash flow than equity at this time. 

Thanks in advance for your input. 

Edward

  

[Brett Chaponot]

It depends on you and your brothers personal situations. Knowing what you've listed I would keep the property and get a renter in after background and credit checks. The biggest complication is the business plan between your brother and you. How will you value a buy out if one of you needs to cash out? Who's responsible for what duties of the rental? If you can settle these things than I love the idea of expanding your investment portfolio together or separately. Borrow against the equity so you're still cash flowing on the first property at a good rate to pay expenses. This would be an awesome retirement plan for both of you!