To sell or not to sell?

[Howard Taylor III]

I currently live in Rockford, Il but I own a condo in Michigan that is tenant occupied. The one year lease on the property is up come October. The tenant wants to renew but I have received an offer for the property which I have to consider at this time for financial reasons. 

I would like to hold on to the property but during this time I am having major cash flow issues. 

[Moises R Cosme]

Howard, 

Here are some questions that may help you make a decision:

1. How much of a cash flow short fall do you have?

2. How much is your current tenant for rent?

3. How much are you making per month on the rental?

4. How much equity do you have in the unit?  

Identify the cash flow short fall & maybe you can increase the rent for the unit to narrow the gap.  If you have an equity position, maybe you can borrow more against the asset offset the new loan payment with increased rent.  

Last question:

5. What do you think the unit will be worth in 5 years?  If you expect an increase in your equity position that is two or three times beyond what your current cash flow need is, you should figure out another way to address cash flow.  

I do NOT presume that fixing your current cash flow need is easy to fix, but I think it is important to look at what your equity position will be in 5 years to give yourself a look into what you are giving up.  If the amount of equity you are giving up is too painful, then finding another solution (no matter how difficult) may be the right thing.  

I hope this helps.