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all cash....thanks for your reply

you are correct, my current loan balance is about 200k (i approxmiated my loan balance...didn't think that principal came down that fast).

My dilemma is whether it is better to cash out and put the 490k in the bank and earn 5% ($22,500) per year or have a net cash flow of $1,800/year in a deflating housing market....

Assuming in 10 years from now the home is fully paid off AND the fmv of the home in 2016 is equal to current fmv of $725k....what would be the benefit of keeping the property?

What is the proper method to analyze this situation. How does a rei view this situation? Your input would be further appreciated.

regards

Chuck

Hi folks

I live in southern california and I am wondering what to do with the townhouse that I used to live in as my principal residence:

Bought in 1999 for $350,000 (4 bed 3 bath townhome)
Current Market Value: $725,000
Current Loan amount $235,000
Monthy loan payment $1920/mo
(15 year loan; 5% fully amortized loan; 11 years left in the loan term)

My wife and I moved out last month and we have a renter in the property now:

Rent: $3,000/mo
HOA: $250/mo
Tax: $400/mo
Insurance: $200/mo

Is it better to keep this property and let the tenant pay off the mortgage (currently have 5% loan) or sell it.

I'm currently renting in L.A., looking to buy a sfr for my family. I don't need the equity from the townhome (although it can help to reduce debt load) to buy my next home.

I like to get some feed back on whether it makes sense to keep this property or sell it and keep the money either in cd, stocks...and look for other rei.

Regards

Chuck

Thanks for your input.