STL landlord new to BP - sell or hold?

[Tracy Hutter]

Hello BP fam!  I'm new to the forums and only started listening to the podcast a couple months ago.  I'm still working my way through the episodes and this website.  I am a tax CPA practicing in a mid-size public firm in St. Louis, MO.  I've been an accidental landlord for about 6 years.  My husband and I bought our first house at the height of the market in early 2008.  We were still underwater when we decided to move in 2014, so we rented out the house to avoid a short sale.  I've learned so many hard lessons over these years--I wish I would have discovered BP much sooner!

My current tenant is moving out this month, so we are now at a crossroads.  Sell or keep renting?

Reasons to sell:
-In the past, the pool of renters has been pretty poor.  The market was flooded with rental properties and it was difficult to find a decent tenant.  2 years ago, it took almost 3 months to find an acceptable tenant with the help of a realtor.  
-Has not cash-flowed hardly at all in the past since our mortgage payment is so high. We bought it for $0 down like a couple of dummies. Can't refinance since there's no equity.
-Self-managing can be stressful while working tax season overtime hours.  I tried a PM at first, but they were basically worthless.
-More bad than good experiences with tenants has left us with a bad taste for landlording and this house in particular.
-Too far from home. We would prefer a property closer to home so it's not a big deal to drive over and take a look at something. It's 30 minutes away. Maybe we're just a couple of whiners...

Reasons to keep renting:
-The rental market has possibly improved since 2 years ago.  Market rents seem higher to me.  And I've been getting a lot of mail from wholesalers.
-I think I could get it to cashflow about $175-$225/mo with new tenants.
-We know the house quite well and don't foresee any high-dollar maintenance issues coming up soon.  Fairly new appliances, etc.
-We might not be able to sell it for what we still owe on it, plus selling costs.  We are just now getting to the point where it is worth slightly more than the mortgage balance.  
-Closing costs and repairs are already sunk costs, as opposed to buying a new rental closer to home that would involve an additional cash investment. 
-I'm genuinely interested in rental properties as a wealth-building and financial independence tool.
-I've already gotten past the learning curve (I hope), and I plan to keep educating myself through BP.

I may post it for sale in some local RE groups for a week or two, and then list for rent if there's no interest.  Thoughts?

I'm so grateful for this community!  Happy RE Investing!

[Clark Kirkpatrick]

If you sell, you'll have to pay costs associated with the sale and then (since you have no equity) you'll walk away with nothing.

If you hold, your tenants will pay off your mortgage and you can refi or sell later and actually turn the equity into cash.

Cashflow is icing on the cake.

I think you'd be well served to revisit finding a property manager. I'd bet money that the St. Louis area has a good one, and if you find them, they'll remove all your headaches and the distance problems associated with this place.

You'll probably have to pay them most of your cashflow. But so what? Your time is better spent doing what you're doing at, which doesn't require you to drive 2 hours. That time is valuable to someone with a rare and valuable skill, like a CPA.

Offload the headaches and keep your tenants paying off your mortgage. The time you'll spend finding a good PM will far outweigh the amount of time you'll spend managing yourself, and if your time is worth $50/hour, then you'll be paying the PM less to manage your property than you'd be losing by driving there to handle issues yourself.