Decision Time

[Ted L.]

I have a property that was previously my residence and I have been renting for a couple years.  I need to decide if I should keep it or sell it.  If I sell it before July, I will be able to take the small gain tax free.

I have it currently rented to an A+ tenant. This is probably the only reason I'm considering keeping it. She sends her checks and contacts me about once a year. When the hot water tank broke she offered to pay half. A+!!

Rent: $1,450

Mortgage, heloc, tax, insurance: $1,573

before maintenance or any reserves etc., I am cash flow negative. I repaired literally everything in the house when I owned it, so maintenance has been minimal recently.

However the house is in a good area with potential for appreciation and I'm 10 years into the mortgage now, so I'm paying down about $350 a month in principal. The rate on the mortgage is 6.125, I might be able to get a little better rate but I don't want to refinance if I'm getting rid of it.

If I were to sell, I would net about 20k after expenses and I could use that toward a better cash flowing property.

So what would you do? Sell it or keep it?