Problems with our Current Rental and Deciding Whether to Sell or Not

[Peter Marriott]

Hello! 

I am new to Bigger Pockets and am excited to learn more about real estate. I wanted to ask advice of some of you who have a lot of experience in long-term rentals. 

My wife and I purchased a home at the very beginning of 2022 and "house-hacked." We lived in a little apartment above the garage and rented out the main portion of the house. 

Pretty soon after purchasing it, we have had several problems, many of which likely occurred due to our lack of enough due diligence. 

We have had a pipe burst during the cold winter months, the roof needed to be replaced (thankfully covered by our insurance), and some issues with electrical, which hasn't been majorly updated since it was built in 1973. Our sewage line has also backed up into the basement, several times.  Our biggest expense was replacement vinyl siding, which costed around $40K. We paid this out of pocket. We didn't know the siding needed to be replaced because it was just recently replaced by the owner before selling it to us, but probably with bad quality paint/siding. 

Just last week, the water heater (which was installed in 2020) suddenly leaked way too much water out of the overflow pipe and flooded a good portion of the basement. That will cost us about $4.8K out of pocket (our insurance deductible under our Rental Dwelling policy). 

Our tenants pay $2,700 in rent and the mortgage+fees comes out to $2,360. Recently, our real estate agent did a market analysis and estimates we can sell for between $575K-$585K, resulting in a net gain after all of our fees of about $100K. We have $150K in equity. 

Would you recommend we keep the house or sell it?  I know that there are issues with any house, but it seems to us as if we have had way more of our fair share of problems since we acquired it. Would it make more sense to move the money we make from selling to a different property that could potentially increase our cash flow? 

The house is located in Utah County, and I think over time it will appreciate very quickly relative to other markets. But these issues have just been really discouraging to deal with. 

Let me know your thoughts, and thanks for reading!

Peter