Should I sell my investment house or not

[Hemender Devangan]

Hello,

I am in dilemma about my investment house whether I should keep it or sell it.

I bought a house in Austin area in 2007 for $310k which includes down payment, closing cost. Lived in that house till end of 2008 then moved to new location because of job. So had put this house on lease since then.

So far, I have paid $150k which includes principal payment, mortgages, expenses, refiance cost, few changes in house. and now balance mortgage is $199k and as per Zillow market price is $364k. I have refinance my investment mortgage at rate 3.50 in 2012. so my monthly mortgage is around $1200 plus around $9000 property tax expense. I am getting around 2100 rent on this house and paying 6% of rent to property management company.

So far, I am not making any money but paying around $5000 - $6000 per year from my pocket to keep this house. 

In  one sense, It is good that I have a fixed asset and hopefully in future it will give me profit.

But I want to know other people view on this - Whether I should keep this house or sell it and put cash into money market account so money can grow must faster.

As this house is more than 7 years old, next year I have to replace carpet and probably few more investment to replace old house hold items.

Please share your view so I can make a decision on this.

Thanks

[Rob Beland]

You could consider where the Austin housing market is. The property  has appreciated somewhat but will it continue to go up or do you think it's at the top of the market? You're paying $9K/year property taxes on a house worth less than $400K? That's pretty steep but not really anything you can control I guess unless. Is that a correct figure? Also, I assume you are depreciating the property and all expenses/income are going on a Schedule E? What is the whole picture looking like with insurance and other operating expenses? What are the loan terms? I'm inclined to think you need to sell and get your cash out of the house and find a better investment. Those taxes are killing you. Drop that house in another market somewhere and you could reduce your taxes by 70%.