On year five of owning my rental, 3 BR. 2.5 ba. house I purchased in 2004 around the time of the peak pricing of $295,000. My current rent of Is $1,795 per month. This property is 4 minutes walk to the medical center and 15 minutes walk to a University. It situated in a good rental area.
After deducting all the expense ( property manager, HOA, property tax, insurances), I made $10,000 a year before paying income tax and Lower to $8,000 if there is vacancy (usually no more than 1 month.)
I owned this property for 16 years and never live in there. Currently calculated depreciation recapture tax if I sell it is $34,000. Current price $360,000-380,000. If I sell it and pay capital gain tax, realtor fee, reconditioning the property and selling cost, I probably gonna get net cash less than $295,000 I original paid.
I'm a single female with 1 grown up daughter. I live in a house that's also paid off ($570K). I am about to medically retired in a few months due to cancer (already had surgery) I have adequate pension income and have a very diversified portfolio ($700K of 401K, devident stocks, IRA, annuity, 200K cash in the bank, no debt and Have inherited a couple property overseas.
Question: Is this rental a poor investment (3% annually net income?) It is still better than the bank saving account Rate.
Should I sell the property doing 1031 exchange knowing this is not an ideal time to buy since the housing price is skyrocket now.
What to do with the money if I sell the property and make a better return of investment?
THANK YOU.
