Should I keep or should I 1031?
Situation: 2 Houses, out of current state of residence, completely paid off, never had a vacancy
House 1: original purchase value x, currently valued at 2x, rental income at 1.5%x monthly when I started, currently 0.75% of 2x over 5 years.
House 2: Original purchase price value y, currently valued at 1.10y, rental income at 0.76%y monthly
y = 0.7x
Problem: I live out of state, everything that happens there, including falling trees is out of my immediate response time and I have to depend on management companies who won't take my business for one reason or another or isn't dependable from everyone else I've spoken with about them - I can't seem to let go of them and not wonder about how people are taking care of my property and prefer to self-manage. I recognize that this may be my own issue but it's still an issue and I can't seem to ignore it. House 1 is a furnished rental and needs some maintenance. I'm considering doing a 1031 exchange to a new market which is hotter than the one I left - to the point that the entry price point is about 2x and rental prices are about 0.75x (it's not much of a change, just a location switch), this market is also as hot as the one I left.
The real estate prices in my original market are increasing at about 10% per year, HOWEVER, rental rates are not, they only moved about 1% in 3 years! So I'm sitting there collecting the same rent every month and I'm getting more taxes and seeing equity build in my properties. I'm not sure if I wanted to deal with a mortgage company and out of state furnished rentals I'm babysitting (albeit with a dependable team of handyman and cleaners) but no property manager. And I thought, maybe this is the right time to sell and cash out now and just buy into the market where I'm living so my hands are on the property on a regular basis and can take better care of it and I don't need a mortgage company I have to pay interest to, I thought about mortgaging the houses so I can keep investing without having a lot of capital locked up. Right now in my new market, you cannot buy in with a conventional loan, it has to be cash deals or else there's not a good deal, just a lot of mark up.
Has anyone ever "moved their investment area?"
What are your thoughts on selling profitable rentals at a seller's market?