Should I hold or should I sell?

[Jonathan Rouse]

Hi team, I have a rental (so far my first and only) in a suburb of Indianapolis.  I purchased this home for 190K and put around 45K into it.  The value right now is somewhere between 275-280K.  The outstanding mortgage is 170K with a mortgage payment of $750 once you include taxes, insurance, vacancy, repairs my monthly is around $1,435 and it rents for $1,800.

It's a nice house, but is starting to wear down and the tenants want to purchase the house. I've owned for about 1.4 years and after the sale and would make around $25,000 after paying myself back for the repairs. This would free up around 60-65K to BRRR other rentals. Your thoughts?

[Andrew Bang]

If you are looking to sell to just turn around and buy another rental, then I wouldn't sell.   With an appraisal at 280k, plenty of cash to pull out (cash out refinance) and use it for a downpayment on the next rental.  Let your renter continue to pay down the mortgage and you continue to gain appreciation.

[Dan M.]

Its a question that I often ask myself with the increased appreciation due to the hot market covid has caused. I read all the time in the forums / advice "it depends on your goals". If you sold it, do you think that you could make more money with the 60k than your currently making now? The market is inflated so what would you purchase / do with the money? 

Long story short my own conclusion is to hold onto everything because by selling it defeats the purpose of what I want which is cash flow and not have to work a traditional w2 job. So now I'm opting to pay down some of the outstanding mortgages and never worry once about half of my portfolio is completely paid for. To me buying more at this point just creates more work, unless a really good deal comes across my path I'm doing exactly what the phrase says "buy and hold". 

[Tina Tsysh]

I agree with @Andrew Bang and recommend refinancing instead. Don't forget that you would have to pay capital gain taxes since you haven't lived in the property for 2 years. You also have to look at your opportunity costs - can you find another deal that will generate you a better return than what you are getting now?