I have a single family home that my wife and I purchased seven years ago. One year after purchasing the house I was offered a new job in another state. The purchase price was $123k. Instead of selling the house we decided to rent it out. The house is 3bds, 1&1/2ba, it has a small shed along with a much larger shed/storage house that matches the house, 1,160sqft.

Fast forward six years later we're interested in refi and now I've come to a fork in the road.

The house currently doesn't cashflow(never has). Based on Zillow the house is valued at $165k. The rent is $1,000 a month, the mortgage with tax and insurance is $891(interest 5.125%), and the management fee is 11%($110). After messing around with rental property calculators I see that this house is not good at all. But a refi may or may not be able to help us. The current tenant has been in the house for two years and the rent hasn't been raised. So I'm considering raising the rent by $50(2%-3%) the next renewal. My property said mentioned compared to other rentals in the area $1000 is a good amount, rent-o-meter says that it's below average.

We currently owe $99k on the loan.

If we don't refi the bp rental calculators say that we're losing $151 a month, ouch. Would it be a good decision to pay of the house off as fast as we can. I don't really like this decision because it that means all of extra cash would be going into this house.

For a 20 year, the closing cost would be $3,500 with a 3.625% interest rate. We will lose $77 a month. After the rent increase we would still be losing $34 a month. And we would cashflow in 4 years.

Based on the rental calculator, If we refi to a 30 year we immediately start to cash flow positive at $9 a month, with all expenses taken out. The closing cost is $3,389 with a 4.375% interest rate. Once we increase the rent by $50 at renewal and continue increasing the rent 2-3% per year we'll be in much better shape.

Or is this just a horrible situation and we should sell?

I hope that I have included enough information if something is missing just ask. Thank you again for your time and I look forward to the replies.

I have also attached photos of the property, small shed, and large shed/storage.