Sell or Hold Tucson Rental

[Jeremy Mabry]

Hello Bigger Pockets Friends,

As the description mentioned, I'm throwing this one out to the BP universe for thoughts/ideas/considerations for a Tucson rental property. Basically I'm trying to decide if this is worth holding onto or if its time to punt (as the Tucson market is heating up it could be a decent sell opportunity). Its a 3BR/2Bath on the eastside of Tucson built in 1986 and has been minimally updated but is in very good shape. 

Here's the key numbers:

Gross Monthly Rent: $1,500

Monthly Expenses: $220 (HOA and management)

Maintenance Expenses: approx 7% annually

Mortgage Payment: $1263 monthly, 3.25% APR, $201K owed overall

Zestimate: ~215K

NOI CY2019: $13,225

Net Income: -1,895

Forecast CAPEX: 8-10K within 5 years

Sooooooo.... This house was purchased right before the collapse in 2008 as my primary residence and I converted it to a rental out of necessity. I never intended for it to be an investment property but here I am. It rents like a champ (never a month of vacancy in 6 years), and has good bones. I'm just looking for some sell or hold considerations. Parts of the Tucson market have been challenging for sellers over the past decade but could be poised for change next year as a market breakout might be forthcoming. My current COAs under consideration are to sell this puppy in 2020 and get what I can out of it (before significant CAPEX) or continue holding and hope for continued growth in the Tucson market?

Annnnnnnnnd go!

[Julie Dunlap]

@Jeremy Mabry the numbers don’t make sense to hold onto it. You’re at a negative cash flow. Since it was purchased at a rough time and held on only to not lose money I’d say that this is your time to break even on your losses and put your time into something that cash flows and has good numbers.