I have 2 rentals in Texas. I am currently living and renting a home in North Carolina. I want to buy a home here. Should I sell one rental house to buy a personal house??
The one i want to sell: Roughly 100k equity. Loses $500 per month. Could make it break even if i got a better loan and IF rates came down just a little bit. remodeled and in a good neighborhood. I am aware of capital gains that would have to be paid if I sold it.
My other rental cash flows 500, so covers this one pretty much.
Would need at least 40k to buy a primary, and we only have like 10k. So would probably take all of the equity and put it into a personal home. I am 23 if that matters.
Rental Property Investor · Indianapolis, IN · Member since 2018 · 4k+ posts · 4k+ votes
3y
@Shane Benson I'll speak for everyone here... how did you get yourself into this situation?
For sure sell the negative cash-flowing property. It's not performing and rates are not coming down anytime soon. A dip in rates will nothing to improve these numbers (long term). It would appear you're holding for appreciation. That mindset is unpredictable and doesn't protect you from the downside risks of holding rentals. Consider it a long term flip, sell it, 1031, what ever it takes, and stop renting in North Carolina. Personally, my family will never rent again unless we're on vacation! Cheers.
Rental Property Investor · Indianapolis, IN · Member since 2018 · 4k+ posts · 4k+ votes
3y
@Shane Benson I'll speak for everyone here... how did you get yourself into this situation?
For sure sell the negative cash-flowing property. It's not performing and rates are not coming down anytime soon. A dip in rates will nothing to improve these numbers (long term). It would appear you're holding for appreciation. That mindset is unpredictable and doesn't protect you from the downside risks of holding rentals. Consider it a long term flip, sell it, 1031, what ever it takes, and stop renting in North Carolina. Personally, my family will never rent again unless we're on vacation! Cheers.
Contractor · Scottsdale, AZ · Member since 2010 · 2k+ posts · 3k+ votes
3y
Yep another vote for selling the one that's losing money. Sounds like you will net enough to buy your primary residence and still have some leftover to potentially put towards another rental in a more affordable market.
Rental Property Investor · Indianapolis, IN · Member since 2018 · 4k+ posts · 4k+ votes
3y
@Shane Benson The other thing to remember if/when rates come down (who knows what the FED will do) buying that primary will be that much harder. There's pent up demand, people on the sidelines, and people waiting for rates to drop.