General Real Estate Investing
Market News & Data
General Info
Real Estate Strategies
Landlording & Rental Properties
Real Estate Professionals
Financial, Tax, & Legal
Real Estate Classifieds
Reviews & Feedback
Updated over 4 years ago,
Not maximizing holdings?
Hello,
My wife and I started investing (buying) in real estate about 20 years ago with no real end game in mind. We’ve asked various financial advisors over the years their thoughts but they’re all so stock market oriented all their advice was sell those houses and put the money in the market. I’m hoping someone here may have a bit more insight to offer than that. My ultimate question is what would you do to extract more profit out of our real estate holdings?
We currently have three rentals in Reno. We are selling our primary and downsizing into a much smaller house that I’m currently renovating. Paid $275k, the reno should cost about $25k and be worth about $340k when done. We’ll see.
So here’s how the rentals sit right now. When I say clears that does not account for repairs, it's just profit beyond mortgage.
Rental 1: value $550k, owe $185k, clears $600 per month, 4.125% 3 years in on a 30
Rental 2: value $275k, owe $80k, clears $400 per month, 4.25% 8 years in on a 30
Rental 3: value $285k, owe $75k, clears $400 per month, 5.875% 15 years in on a 30
There have been a few 1031’s over the years so the original purchase dates are all about 2001 so there is quite a bit of depreciation racked up. I know I could get more rent out of the two properties clearing $400 per month but each would require about $15k in updates to get higher rents. I'm guessing an additional $400 per month each. I would have to have the current tenants move.
I retired earlier this year and will probably relocate or travel if things calm down with COVID. I have good tenants that have all been renters more than 10 years. None of them have plans to move. Should we sell one or all take the tax hit and invest in the stock market? Would you hold them? We could pay them off but not sure if that’s the wisest use of the cash. I could refi the high interest rate one but we’re so far in and the balance is so low not sure it makes sense. Again, when we started we had no clear end in mind and honestly don’t at this point. We have enough retirement income aside from the rentals just not sure what might be the best use of it all.
Your thoughts are greatly appreciated especially since you all are more well rounded thinkers as opposed to the one track financial advisor minds.