To sell or not to sell profitable vacation rental

[Cody Robison]

Gosh I'm in a good pickle...

I have a vacation rental in an amazing market that I have owned for 10 years and have easily grossed 45k+ a year consecutively and no signs of slow down. I have about 170k in it and only owe about a 100k. I can sell for 325k right now. My thoughts are to 1031 exchange and build a brand new vacation rental in same area. Basically to have a brand new more desirable and less maintenance and less negative comments on age. It's currently 30-40 year old log cabin.

Am I dumb for selling? Should I keep it and just deal with the maintenance and figure out a way to leverage and still build a new one and keep both? Just figured I could possibly own a brand new cabin free and clear. But I also dont want to be kicking myself later thinking how silly I was to sell it.

[Avery Carl]

What a great problem to have! My question is this: would 1031-ing and building a new one be a lateral move cash flow wise, or would it increase your cash flow? If it wouldn’t significantly increase cash flow to 1031 exchange it, then I’d work on a way to keep the one you have and leverage for the new one.