I love BP for all of the different perspectives. What a great community!
I have a totally different take on it (and was in a similar situation just a few months ago).
The $429K is not all your money, so the argument others make that you could take that money elsewhere is false. You mentioned that it is worth $429K, but you purchased it for $188K, and you put $110K into it. That leaves $131K in profit (without deducting expenses for sale, taxes, and any gains). So really, that is what we are talking about here, as you mentioned, you could refinance to potentially pull out your seed money, so your ALL IN is minimal if any at all. So, we are really just comparing profit options.
It would take you 40 months to make up $131K with $3,200 in rental rate, just figuring the rental rate alone without expenses and mortgage payment. But you get the idea. Calculate the mortgage payment and expenses for the property, and deduct it from the $3,200. Then calculate how many months it will take netting that profit to equate to the $131K that you stand to make on a sale now.
Keep in mind, the profit you are making in rental income is taxed, but not as a gain. So, you stand to keep more of it, than if you sold now.
In August, I purchase a property at trustee sale with the intent to flip. My husband and I went through the rehab and got it all ready. When we sat down to do the final analysis before listing it, we realized that the profit we stood to make on the flip would be realized in 18 months if we rented the property. Then after the 18 months, it would all be excess profit! Since we weren't in a hurry to pull the profit out, we made the decision to hold it as a rental. We refinanced it to pull our seed money out, so we had 0 of our own money invested in the porperty. Now, it is our 2nd highest cash flowing property....ALL done with OPM!
So, depending on what your investment strategy is, it is a benefit to look at it from different angles, and decide the best direction for your investment strategy.
Best of luck to you!
