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Updated over 3 years ago,
Selling a rental property to pay off my primary residence
Considering selling a rental unit to pay off my primary residence. I have 2 townhouses in a very good area about 4 hours from my primary residence. From the outside the two combined look like a duplex and share a common yard even though they are 2 separate properties. They are worth approximately $250,000 each. I owe $74,000 one one and $96,000 on the other. Currently renting for $915 and $880 respectively although I will raise the rents by 8% in one month. The interest rates are 5.25% and 4.5%.
My primary residence is worth about $250,000 and I owe $99,000. I have a "mother-in-law" apartment over the garage that I rent for $635/month. Currently in the process of refinancing my primary mortgage but will terminate the process if I decide to pay it off with the equity of one of the town houses (after paying capital gains tax of course).
Do you think I should sell one of the townhouses to pay of my primary residence or continue as is and continue with the refinancing process? It is nice to have "control" of both properties as they are essentially a duplex with a common yard. The yard could easily be divided with a fence.