Hi Everyone,
TL;DR: My rental is building equity, but not so much cashflowing. What should I do?
I'll get right to it, since there are numerous posts like mine.
I am currently renting my previous primary residence:
3bed, 2bath, 1600 sq. ft., 2 car garage, .33 acre lot, fenced, built in 2006 - shows well, and the market is pretty warm, thinking it's going to get hot due to economic development in the area. Toyota manufacturing plant within a 20 minute drive is being developed and should be operational in about 2-3 years, and will bring over 4000 direct jobs.
Home Value: ~$150,000
Mortgage: $1,004/mo. with a 2.875% interest rate on a 15 year mortgage, and includes the property tax escrow and the insurance.
Remaining Loan Balance: $88,000
Rental Income: $1,100/mo. Which is high for the area, but the home is worth it, and will probably remain at this or a higher rent for the foreseeable future.
I have a steady career, and if it were to go vacant for a month or 3, I would be able to carry the mortgage. I'm also in a position to cover any capital expenditures for the foreseeable future, which would most likely be the HVAC, since the roof is 6 years old.
I'm also carrying a mortgage on my current residence for $800/mo. if that would factor into anything.
I'm self managing the property, to get some experience and saving on PM fees.
Should I explore other options with this property? Refinance the $88,000 balance and potentially cashflow $500/mo. free and clear? Should I sell the property and look for other options? Should I try and pay the mortgage off early, to get to cashflow, and build money for future real estate investments (I should be able to do this within ~3 years if I keep it rented)?
A few additional thoughts: If I decide to pay the property off, I'll most likely hand over the management to a dedicated property management firm in order for it to be a more passive income earner.
Thanks for any help,
Nathan
