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Updated over 6 years ago,
Analysis paralysis? Help analyze this deal
Long time reader first time poster. Amazing community!
I think I've hit analysis paralysis stage with 1 property in my rental portfolio and would appreciate some financial advice, specifically - based on the numbers, does it make sense to hold long term, or 1031 into something better?
Some info that perhaps will help with your answer:
- The duplex is paid off, purchased 2 years ago with cash - $525k.
- Arguably the best location in the city, so appreciation is pretty much guaranteed.
- In the past 2 years it went up in value approx $100k without any work.
- I'm a buy and hold investor, usually hold for 20+ years.
- Being paid off and after all expenses, cashflow is $2,308/month.
Here are Investment Returns after calculating rents; taxes; insurance; capex; maintenance etc.
The columns are: Year 1, 2, 3, 5, 10, 20, and Year 30.
Here's my dilemma - Looking strictly at cash on cash, it's quite low, and it'll take 10 years to get my money back. However it's located in a very high demand location that will only get more expensive with time. What are your thoughts on these numbers? Considering that I usually hold rentals for a long time, does it make sense to hold this property; or sell and 1031 into one that has better ROI and COC but not in the same location? I should mention there is some room to increase rents to the absolute max it can get, which might backfire. If I do that, here are the new numbers: