Determining if I should sell a particular rental property

[Suneel Goud]

I'm trying to determine whether I should sell a rental property that I have. I think the answer is yes, but I wanted to get the perspective of some other seasoned investors.

I bought this condo for my primary residence about 10 years ago with essentially nothing down. It's appreciated somewhere around 50-55% since I bought it. My wife and I moved out about a year and a half ago and are now renting it for a pretty solid rate. It's also in a prime location that's still growing fast, however, given it would probably sell for somewhere around $525K today, I do feel the value is reaching its limit given it's a condo. It's been an amazing investment so far, but I'm starting to wonder if I should sell it for a few different reasons:

1. I ran some numbers on it so see how it compared to other investment opportunities I'm looking at. I ran some Cash on cash, cap rate, ROI, etc. as if I were buying the property today. Many of the other properties I'm looking at look better from a numbers standpoint IF I CONSIDER my estimated equity in the property to a cash investment. Would you agree that I should consider my equity to be a "tied up cash investment", so to speak?

2. We moved out about a year and half ago. I recently learned that my wife and I can avoid capital gains tax on upto $500K in profit if we lived in the property for 2 of the last 5 years. Although I don't need the cash right now, point 3 made me wonder if I should just cash out.

3. I did a little research on 1031 exchanges, and realized there are some significant constraints (identify 3 target properties within 45 days after selling the property you're exiting, then close on one of those three within 180 days). This seems like it could force you to make some decisions in this process that may be less than ideal in order to ensure you adhere to the requirements. Ultimately, this makes point 2 above more attractive since there are no requirements for reinvestment. I can take my time and find the right deal for the next one(s).

Even though this property is cashflowing well, and I don't need this money right now, would you agree that I should analyze this as if I were buying it today in order to properly compare it with other properties? And would you agree that I should consider my estimated equity as my cash investment when running the numbers so I can fairly compare it against other opportunities? I'm thinking I should sell it and reinvest somewhere else. What would you do in this situation?

Thanks!

Suneel