"hell house" rental advice

[Jenny Smith]

First time poster here, new to bigger pockets and we are very excited to take it to the next level. We are relatively new investors and are making mistakes along the way and especially one of our rentals is pulling us down.

I would like to ask for your ideas and input as to what would be the best way to handle this particular situation.

I do apologize in advance for this long post.

Background:

We got overly emotional with one of our rentals (it is a very nice 3/2 on a lake) and bought it retail price (yeah I know) right at that age window where everything needs to be replaced. We needed a new A/C, appliances, faucets leaking, and the roof started leaking. We did not have the money to replace the whole roof (11k) so we paid for a repair. Obviously we are negative cash flowing based on rental income/mortage/taxes etc alone and the cost of repairs really are pulling us down. However based on current prices we do have about 90-100k in equity build up.

Now, after the last hurricane blew a significant number of shingles off the roof we are again faced with what to do. We can repair the damage for 2-3k or replace the whole roof (11k) but what is more important is that we are trying to figure out what to do from a smart investor point of view.

The tenant treats the property very well, pays on time, and is planning on staying long term.

The lease (yearly) is up for renewal in a couple of months

So:

• sell the house in March and use the equity to move into smarter investments? but then repair the roof or replace the roof? will the 11k (replacement) be recovered in the sale price?
• pay off the remaining balance to then own the house outright to help the income/expense ratio? we then have about a 6% ROI, not counting possible increases in value, but this ties up cash. The reason why I am contemplating this is that by now we have replaced almost everything except for the plumbing, and we have a very good long term tenant.
• Other creative strategies that you can think of? I am wondering if a rent to own would be the way to go? Can I make the tenant responsible for the repairs in that case? it will help the cash flow situation a bit and we can decrease the property management cost a bit.

Anyone have any experiences like this?

Any and all help or insight is greatly appreciated! Thank you all in advance!

Jenny