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Updated over 15 years ago,
Why Sell?
New investor question. Why sell? In some circumstances it may make sense, but for the vast majority why not just hold. If the property cash flows now, it should for the duration. Costs will go up, but so should the rent and the P&I should not ever increase (unless ARM). My goal is to pay off the property I own now and then using logic and the 50% rule I will profit half the rent every month (on average). So why sell? I get that you lose the tax incentives, but I would rather make more money and pay the taxes on it then make less money but pay less in taxes.
My logic in numbers:
Rent $1600
P&I $715
50% Rule OE $800
Cash Flow $85 (Small, but my previous residence and I only have 14 Years left on the mortgage)
14 Years from now: All these numbers would have to be adjusted for inflation and cost changes, but considering it all a wash
Rent $1600
No P&I
50% Rule OE $800
Cash Flow $800
Permanent Income of $800 per month (I actually assume that the rent will go up in 14 years, but not even counting on that it is still $800 a month forever)