Hey everybody,
I will admit, I am new to Bigger Pockets website. I have been listening to the podcast off and on for about a year now, and have been doing real estate investing since December of 2018. I am seeking advice because I am at a crossroads, and I'm wondering if anybody can share their experience with a similar situation to what I'm experiencing and provide any insightful feedback. Thank you to anyone who reads this and offers advice, I really appreciate it. This is my first post, so I'm not even sure if this is what people post about on here, but I figured i'd try.
My wife and I have a rental property in Nashville, TN where the market is booming. It's a house that was built in 1958 that we lived in from April 2017 - November 2018. I am currently renting it as a corporate rental/short term rental for 90 - 180 day leases and making 3x what my mortgage payment is. The area has appreciated a ton in value and, like most other places, the inventory for new houses in Nashville is low. Most of my tenants are people moving to the area but are renting it while they look for a house to purchase.
When we bought it in 2017, the inspector let us know the water heater and HVAC were getting close to end of life. We are maintaining both with annual service but I know an impending replacement is coming. The bigger issue is that there is an odor in the house I can't figure out. We have a basement and I feel like what I'm smelling is just underground smell. I don't believe it to be mold or water. We just installed 2 dehumidifiers with condensate pumps installed so water is being plumbed out of the house at all times through this condensate pump. Just installed this yesterday so i'm hoping this remedies the smell, at least a little bit!
My dilemma is that I'm unsure if I should just sell it. The house has appreciated about 50% in value since our initial purchased price. But, I don't think I could sell and get into another rental property that has as good of a profit margin as this one! It was like we got into the market at the perfect time and I'd hate to give up the great profit. We have 2 other properties in Nashville that both do well, but not nearly as good of profit as this particular house. I'm nervous about selling and putting into a 1031 because apparently I only have 45 days to identify the property I would be buying otherwise I have to pay capital gains tax before I can properly identify a good opportunity. I have paid enough principal on it that I feel like I could sell it and buy 2 new rental properties but not in 45 days.. I have impending repairs of say atleast $10,000 if water heater and HVAC go out, which I am prepared to pay, but the smell has me perplexed. I'm wondering if I have a bigger issue on my hands that I don't know about. I've tried to remedy the smell many times and can't get it to go away. I personally believe it's just the underground and the insulation they used in the 50's isn't great so we smell the dirt around our basement... if that makes sense.
Anyway, is the grass greener if I sell and get into something else? My wife wants to stop working in the next year or two and we have 1 baby and another on the way so my instincts tell me to just save and put some money into the house to try and fix the smell issue (don't know how, but want to look into it). My wife on the other hand is convinced we should sell it. I talk to my other real estate friends and get mixed reviews.
I think it's a win-win situation, but i'm curious if anybody has experienced similar situations and if they could weigh in and give me any personal stories or advice. It's a great problem to have, and I am thankful! I just haven't sold any of my rentals yet, and I'm nervous to let this one go because I feel like it's the best profit generator I could ever get into.
Any advice would be appreciated. Thank you!!
