Hold or sell? Experienced landlord - clueless number cruncher.

[Jo F.]

I have owned my home for 8 years and have about 250k equity in it. It seems like an ideal HOLD (historically still the lowest purchase price in a great upscale neighborhood - I purchased from a retiree who moved overseas and got a killer deal) but I really need some guidance on how to analyze it as an investment because although Im an experienced landlord, Im a total newbie when it comes to number crunching investments. Im debating whether or not to sell and put the equity into other real estate or hang onto it and just pull some equity from it when I refinance next year.

I tried to use some of the bigger pockets calculators but they seemed more geared towards analyzing a potential purchase as opposed to a home Ive owned for almost a decade(?)....Im assuming Im wrong here but just need some confirmation on what calculator I should be using for my specific situation.

Background:

Im married - our goals are building up a good portfolio of buy & hold properties. We would like our properties to be our retirement income. We are dual American/Canadian citizens so we can buy in both countries and are open to investing out of state/country so although we love where our house is located we aren't even living in it and probably won't be for at least the next ten years anyway so I don't know anymore if it makes sense to hang onto it.

The neighborhood is one of those cutesy ones where they've built all the homes to look like dollhouse/victorian homes, walk up brownstones with charming old english street lights etc. There are multiple pocket parks, an elementary school, coffee shop, market, pizza etc all within walking distance. It is considered the "nice" area of town and currently the average home there is selling for over 1 million with many more lots being sold and new construction happening constantly. We were/are in love with it however my husband works in sports and his job takes us all over the world and will continue to so for the long haul so for the foreseeable future this home is purely a rental for us.

My house was the cheapest single family option there when I purchased it because there is barely any yard so it would still be considered the affordable single family home option there - a condo alternative - and sell for around 575k. It is a basement walk out with two separate main entrances. We bought this home because we loved it and wanted to raise our family here. My husbands job has since taken us overseas and we are trying to look at the house with more with investment eyes. We would love to hang onto it for the long haul but our priorities are purely financial so if it made more sense on paper to cut the strings and put our money where it would work better for us we would.

Details:

We bought the house for 400k and currently owe 320k on it at 2.79% interest. Our mortgage is up for renewal in July 2018.

Property taxes are around 3500 for the year

I suited the house this last summer so it is split into two units (one upper, one lower). The upper is currently rented for $1450 and the lower is currently rented for $1375 - utilities are included in both and usually average $250 a month. 

My issues are since it is a single family home turned two unit abode noise is a problem - the walls seem paper thin...the HVAC vents are connected between floors so you can CLEARLY hear every conversation anyone has. The tenants sometimes complain and I don't blame them - it hasn't been a real issue to them but just something in the back of my mind that bugs me since I know Ill keep hearing about it. I am trying to come up with a solution (adding an insulated drop ceiling) but everything I read seems to tell me it won't help much since the HVAC is connected between floors (which is where a lot of the noise comes from) and something about us having pot lights downstairs making a drop ceiling a hassle to install. Also, downstairs is heated via gas fireplace and the central air is controlled in the upper unit. Ideally I need to get a separate system installed downstairs for the heat to be a consistent temp (I had an appt for a quote this morning and am waiting to hear back on this) however I know its not going to be cheap so Im debating whether to go through with all these extra costs to turn what was meant to be a single family home into two units or just rent the whole house or sell.

To combat the issues above I could just rent the entire house out to someone who would use the downstairs as a mother in law type unit for themselves...that would probably make the most sense - I could realistically get 2200-2500 clear for rent and have them do their own utilities. Again, numbers wise, in the long haul would this even be considered an investment for us? Our house has increased in value 175k in 8 years and Im sure it will continue to do so slowly and steadily.

My house is in British Columbia - the sales prices seem very inflated at the moment... It seems like a great time to sell and hang onto the profit until another "right" deal comes along, but then again I feel like Im selling what is considered an ideal buy & hold (or is it?!) Im not sure whether to keep sinking $ into this house and I guess my first step is to see if its actually really is a good investment for me or if my money could be put to better use.

Ive read so much my head is spinning and numbers are not my strength... this is so choppy and long winded  - Im sorry.... can someone let me know which calculator should I be using to analyze my property correctly? I know I will look back embarrassed about this post but any guidance would be very appreciated.