Sell or keep income producing duplex

Tacoma, Washington
Buying & Selling Real Estate
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Sell or keep income producing duplex

Tiffany Palaskas
Member since 2025 路 16 posts 路 9 votes

Hi, I currently own a duplex in Puyallup WA. We recently moved to TN and have both sides rented. We profit about $1200 a month from both units. My question is, is it wise for me to sell it and profit $150-200k after owning it for 4.5 years and invest where I currently live? Or should I keep tenants in units and once they move out turn it into midterm rentals for traveling nurses, etc? 

The property is in a great location,  close to stores, restaurants, fair grounds, freeway access, and less than a mile from hospital. Each unit is 3bd/1.75ba, single car garage and fully fenced backyard. 

Any advice would be helpful. We want to build our portfolio. Just trying to see what is the best option. 

Thanks, 

Tiffany Palaskas

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Caleb Brown
Real Estate Agent 路 Kansas City 路 Member since 2018 路 4k+ posts 路 3k+ votes
1y

If you don't need the equity/cash I would keep. If MTR is a good strategy you will further increase your cashflow. Just make sure the management part is taken care of. That would be the biggest pain point when moving. If you do sell I would do a 1031 exchange

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  • Havital Miltz
    Accountant 路 Accepting new clients from anywhere in the USA 路 Member since 2025 路 37 posts 路 19 votes
    1y

    If you convert a main home to a rental,  you do not get the full $500k exclusion. You get a portion,  not all.

    I didn't realize this was your main home. Did you live in one side and rent out the other, and now rent out both sides? If that's the case you most definitely don't get the $500k exclusion, even if you would not have rented out the portion you used to live in....

    2Reply
  • Havital Miltz
    Accountant 路 Accepting new clients from anywhere in the USA 路 Member since 2025 路 37 posts 路 19 votes
    1y

    Scott, depreciation for a rental,  even if she has not taken it , would have to be figured during the sale. 

    Whomever will do her taxes when she does sell, (can be done prior, and should be asap) will have to submit a change of accounting method form .....I've had multiple clients that never took depreciation and when they sold, we had to fix it...doing your own taxes isn't as easy as some tax software companies make it seem 

    2Reply
    • Scott JohnsonBusiness Member
      Specialist 路 Greenville, NC 路 Member since 2019 路 673 posts 路 408 votes
      1y

      @Havital Miltz thank you for confirming my suspicion. I found it very unlikely that the government would not want to get their piece of the pie, especially if they had purchased a new primary home.

      Donyou have a Tax Code or Publication Number you can share so I can study up and understand your thought process more in depth? 馃槃 

      [email protected]
      1Reply
  • Tiffany Palaskas
    OP
    Member since 2025 路 16 posts 路 9 votes
    1y
    Quote from @Scott Johnson:

    @Tiffany Palaskas Do you still live in it now? If not, do you own the primary home you're living in now?


     No, we don't. We moved out end of November. We bought our house in TN with only 5% down. So have another mortgage here. 

    I just got a message from the new tenant that moved in in November,  that her and boyfriend are now breaking up and she wants out of the lease. And not sure what the boyfriend plans on doing. They are both on the lease. So now I have a whole different issue to deal with. It wouldn't be that big of an issue if we still lived there, but we dont. I had previously posted the property for rent, showed it and screened the tenants.  

    0Reply
  • Tiffany Palaskas
    OP
    Member since 2025 路 16 posts 路 9 votes
    1y
    Quote from @Havital Miltz:

    If you convert a main home to a rental,  you do not get the full $500k exclusion. You get a portion,  not all.

    I didn't realize this was your main home. Did you live in one side and rent out the other, and now rent out both sides? If that's the case you most definitely don't get the $500k exclusion, even if you would not have rented out the portion you used to live in....


     Yes. We lived in 1 sise and rented the other. Then just recently, in November,  started renting out both sides. 

    0Reply
  • Havital Miltz
    Accountant 路 Accepting new clients from anywhere in the USA 路 Member since 2025 路 37 posts 路 19 votes
    1y

    @Tiffany Palaskas you don't have a property mag?

    it's very difficult to manage from a distance,  if you decide to keep it, i highly recommend to higher one.

    I live in SC, when i lived in CT i managed my units, once I left I got a PM.

    0Reply
  • Tiffany Palaskas
    OP
    Member since 2025 路 16 posts 路 9 votes
    1y
    Quote from @Havital Miltz:

    @Tiffany Palaskas you don't have a property mag?

    it's very difficult to manage from a distance,  if you decide to keep it, i highly recommend to higher one.

    I live in SC, when i lived in CT i managed my units, once I left I got a PM.


     No, not at the moment. If we keep it, we will get one. 

    0Reply
  • Havital Miltz
    Accountant 路 Accepting new clients from anywhere in the USA 路 Member since 2025 路 37 posts 路 19 votes
    1y

    Not sure the code number, but I'm pretty sure you can find the publication that talks about depreciation..... I see you suffer from insomnia and are looking for ways to solve that without medication 馃ぃ馃ぃ馃ぃ....

    Taking depreciation isn't optional,  if you don't take it you still have to recapture when you sell...

    0Reply
  • Tiffany Palaskas
    OP
    Member since 2025 路 16 posts 路 9 votes
    1y
    Quote from @Scott Johnson:

    Secondary question. Have you been depreciating it?

     Yes. I believe we did. But we are new to everything real estate really. We bought the duplex so that we didn't have to pay such a big mortgage.  Which has been a blessing. 

    So honestly,  we have a lot to learn about RE and everything Tax related for it.

    0Reply
    • Scott JohnsonBusiness Member
      Specialist 路 Greenville, NC 路 Member since 2019 路 673 posts 路 408 votes
      1y

      @Tiffany Palaskas consider the refinance route as well. That's tax-free money, but your rents need to be able to support the new mortgage payment.

      [email protected]
      1Reply
  • Steve Vaughan
    Rental Property Investor 路 East Wenatchee, WA 路 Member since 2014 路 10k+ posts 路 16k+ votes
    1y
    Quote from @Tiffany Palaskas:
    Quote from @Scott Johnson:

    @Tiffany Palaskas Do you still live in it now? If not, do you own the primary home you're living in now?

     No, we don't. We moved out end of November. We bought our house in TN with only 5% down. So have another mortgage here. 

    I just got a message from the new tenant that moved in in November,  that her and boyfriend are now breaking up and she wants out of the lease. And not sure what the boyfriend plans on doing. They are both on the lease. So now I have a whole different issue to deal with. It wouldn't be that big of an issue if we still lived there, but we dont. I had previously posted the property for rent, showed it and screened the tenants.  

    Exactly. This is a sale for me. You already live 12 states away. Mid-term will only compound your mgt headaches. 

    Hopefully your one side will vacate properly and clean.  Easier to sell with 1 side show-ready. 

    Sell, get the tax savings while you can. Hard to give up such a low mortgage rate, but in the end that's small potatoes compared to potential OOS problems. 
    1Reply
  • Marcus Auerbach
    Investor 路 Milwaukee - Mequon, WI 路 Member since 2010 路 5k+ posts 路 7k+ votes
    1y

    OOS is hard. Even for LTR. And even a good PM will not watch your money like you do. My advice is generally: seldom sell. 

    But you should also invest in your backyard and use your home-field advantage. One side vacant is the best time to sell. My vote is sell it.

    2Reply
  • Bud Gaffney
    Rental Property Investor 路 Boston, MA 路 Member since 2019 路 2k+ posts 路 1k+ votes
    1y

    What are you going to do with the 150-200K? Unless you are doing a 1031 exchange or desperately need the cash I would hold.

    0Reply
  • Bud Gaffney
    Rental Property Investor 路 Boston, MA 路 Member since 2019 路 2k+ posts 路 1k+ votes
    1y

    You can also refi if you want cash for another property, and hit the note a little harder as the interest will be higher. Selling for satisfaction today will hurt in the long run. It's tempting but that 150-200K you're talking about today will be 500K+ 1 day. Hold it!

    0Reply
  • Bud Gaffney
    Rental Property Investor 路 Boston, MA 路 Member since 2019 路 2k+ posts 路 1k+ votes
    1y

    I own 11 properties currently and I have only sold 1 in the past because it was a condo with a fraud HOA company. Sold for 275K and it's worth 400K now. RE always goes up overtime. HOLD ON TO IT !

    0Reply
  • Jeremy Jareckyj
    Real Estate Agent 路 Salt Lake City, UT 路 Member since 2020 路 490 posts 路 205 votes
    1y

    You have to try to estimate MTR income in your area + take into account the costs associated with MTR setup. How quickly will the income from MTR revenue give you those MTR setup costs back? Is it worth it? It sounds like at this time it is producing well for you. 

    0Reply
  • Jesse Rivera
    Lender 路 Long Beach, CA 路 Member since 2013 路 496 posts 路 296 votes
    1y

    If you have a good property manager:

    DO NOT SELL!



    DO NOT SELL!



    DO NOT SELL!



    DO NOT SELL!

    1Reply
  • Michael SmytheBusiness Member
    Real Estate Agent 路 Metro Detroit 路 Member since 2023 路 4k+ posts 路 3k+ votes
    1y

    @Tiffany Palaskas pretty easy answer - where can you BEAT what you have in WA with something you buy in TN?

    Logical Property Management4.9453 Reviews
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    1Reply
  • Jesi Young
    Real Estate Agent 路 Minneapolis, MN 路 Member since 2025 路 6 posts 路 6 votes
    1y

    @Tiffany Palaskas Wow, what a whirlwind with your tenants trying to break the lease after you are already questioning on selling!

    I agree with the others when they say to hire a PM; a property manager will have access to better screening and fraud detection - and hopefully can add some protections in the legal arena too. Some of our clients in MN have several properties and live in another country, so it is possible.

    On the investment side, the deferred maintenance (roof, flooring) will eat away at your equity/appreciation; but, you have a property that cash flows. The other benefits I see are debt paydown (done by tenants) and tax deductions. May be worth it to check with a cost segregation company (depreciation) and start scouting property management companies.

    Someone smarter than me could probably tell you about taking a HELOC out to fund the next investment property in TN. I am always interested in how people use the BRRRR method in these cases. Good luck!!!

    1Reply
  • Drago Stanimirovic
    New to Real Estate 路 Miami, FL 路 Member since 2024 路 1k+ posts 路 452 votes
    1y

    Hi Tiffany,

    A good strategy could be testing one unit as a midterm rental when a tenant moves out. If cash flow jumps significantly, it might be worth keeping. Otherwise, selling and using the proceeds to scale your portfolio locally could accelerate your long-term goals. If you need help financing your next investment, I鈥檇 be happy to assist.

    Drago

    1Reply
  • Basit SiddiqiBusiness Member
    Accountant 路 New York, NY 路 Member since 2015 路 8k+ posts 路 3k+ votes
    1y

    If you want to build your portfolio and its a property that is already making money, why would you want to sell it?

    [email protected]917-280-8544
    Basit Siddiqi CPA4.979 Reviews
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    1Reply
  • Tiffany Palaskas
    OP
    Member since 2025 路 16 posts 路 9 votes
    1y
    Quote from @Basit Siddiqi:

    If you want to build your portfolio and its a property that is already making money, why would you want to sell it?


     We would prefer to have properties in our neighborhood so we can manage them ourselves. 

    0Reply
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