Do you want to continue? Advice needed on if to sell a rental.

[Eric Klug]

Good morning,

Yesterday, I received news that my tenant is ending her lease early.  This shouldn't be a problem, as I have a solid termination clause in the lease.  The question is, do I immediately look for a new tenant, or list the property for sale?

Quick numbers:

Purchased at $237k, currently valued roughly at $266k, I have $144K left on the mortgage at 3.976% (principal payment is ~$350/month), current rent is $1800, net cash flow is $245/month.

This is a townhouse that was built in 2012, and nothing of note has needed replacement.

I'm confident that I could easily get a new tenant in for $1800-2000, but I believe that maintenance cycles will be coming due in the near future.  The house has two AC units and two furnaces.  

I was laid off last year (as were many) and went through a portion of my savings.  Between the relatively good RE market, the time of year, current low-interest rates, and my reserve being less than desirable, I believe that it would be advantageous to list the property for sale.

This would also give me a chance to wipe my financial slate clean of some consumer debt, finish a stalled renovation and get it rented, and still have the cash to put down on a duplex in the near future.

I am interested in hearing the community's thoughts and appreciate the insight.

[Aaron W.]

@Eric Klug  It sounds like you have answered your own question. Ultimately, wiping your slate clean from consumer debt is always desirable as it is some of the worst debt you can have. It looks like you will still have rentals and the opportunity to continue investing. 

Best of luck!