Help me evaluate my rental

[Michael B.]

Hi all,

I've been renting out my condo for 3+ years. I want to get a sense of whether I'm "doing it right" or if I should just sell it when the lease is up next summer, or ... 

• Located in a poorer Seattle neighborhood
• I'm currently renting it out for $1900
• but spending $1318 on HOA + Mortgage + Insurance every month
• for an income of $582. 
• Maintenance costs have been minimal and I do most of the repairs myself -- over the last 3 years I've spend $500 on maintenance. 
• Zillow's rental zestimate is $2500/mo but IMO this seems high I think I could get $2200 in the open market but the tenant is ideal in many ways (stable, no complaints, does have a pet though) -- I do increase rent every year though
• The Zestimate on the place is $470k but that seems high, it can probably sell for $420k. I have $102k left on the mortgage. 

My thoughts:

Strictly speaking my cap rate seems low in this case 12*582/420 = 1.6%. If I were to sell the place and pull out my $290k in equity and reinvest in treasuries with 3% return I'd get ~9k/yr vs my current income of <7k/yr -- and I would obviously not dump it all in treasuries. 

The caveat is that the property itself has grown a lot in value over the last year (13% per Zillow -- which seems pretty great considering the leverage due to mortgage.) Another consideration is that I also have many other of my assets in the stock market so this provides some nice diversification and I also hope to one day to get more invested in real estate and this helps me keep my foot in the water -- though I haven't had a chance to learn and do as much as I wanted to because of work/family obligations. 

Another side question is whether I should form an LLC for this property. My research indicates that it brings relatively little value for just one property, but maybe a worthwhile exercise for the future?

I welcome any thoughts / ideas / feedback.