Should I sell a high cashflow property?

[John Lewis]

I have a property that is giving me great return and cashflow currently but this is also the last year that I can avoid paying capital gains tax under the 2 out of 5 years rule. So here's the numbers...

I paid $60k for the property in 2010 and put about $40k into renovations. The house is a 3 bedroom 2 bath ranch style home with a 1 bedroom mother in law suite. I live in an area with a lot of refineries so I've been renting the house and apartment out weekly furnished and have had virtually no vacancies over the past 2 years. Could be luck with a few big construction projects though. I'm basically clearing about $2k per month on this property but I know my vacancy rate could increase.

A similar property with a mother in law apartment just sold down the street for $180k. It is very tempting to sell and avoid the capital gains tax but would be hard finding a property giving me these kind of returns. At the same time if I leverage correctly I could buy multiple properties. Any advice?

[Jason D.]

@John Lewis I would probably refi and pull equity out before selling. If you're netting $2k per month It'll still give you a great return on equity if you refinance it at 75%, and you can take that money and purchase more.