Hold or Sell Aurora, CO rental in SE Aurora 80016

[Omar Shahid]

I currently own a rental in the 80016 zipcode in Beacon Point close to Southlands Mall area, which is 4 bedroom 3.5 bathrooms, 2600 sq feet . I am debating on selling this or holding it. I purchased the home for $335K in Feb 2013 and moved out in June 2016. The house is worth about $450K and we rent it our for $2,650 a month. My monthly loan pmt with insurance and taxes is about $1700, so the monthly cash flow is great. It is a newer house and the tenants are very easy going so I have had very minimal repairs. HOA is only $140 a quarter!!!. I love this rental since it is in the same neighborhood where I live which makes it very easy to manage or show the house with vacancies. My concern is that this is an expensive rental and I know that it may be difficult to rent out when the current people move out. If I sell it before June 2019, I can avoid the capital gains tax. I am considering selling this and buying another cheaper rental, since I have a lot of equity in the home, I owe about $246K (value of home is $450K to $470K). However, the Denver market is so pricy that I have no idea how I will find a deal. I am a part time landlord that owns only 2 rentals that I manage myself and I have a full time job, so I don't have a lot of time to find deals. Should I hold or sell before 2019??? Should I try renting it for as long as I can and maybe do a 1031 exchange after the 3 year period is up??? Also, any Denver/Aurora investors investing out of state or currently investing in Colorado???