Keep Or Sell?

Question

Hello All,I have an investment property I purchased in 2023 that I am deciding whether to keep or sell.The property is a duplex with a 1/1 on one side an a 2/1 on the other side.  When I purchased the property, it was tenant occupied on both sides and I had a decent cash flow of about $350.00/mo (after mortgage, reserves, management fees, etc.).  About 6 months after purchase one tenant gave notice and the other walked away.  I was able to find new tenants after a few months, however, one tenant left after 1 year and I've just had to evict the other tenant.  So, the 1/1 has been vacant since 6/2025 and the eviction just happened this month on the 2/2.  The evicted tenant has paid no or partial rent for the last few months. Essentially I've had no cash flow and the home has decreased in value anywhere from $8k-$10k.  The reserves have also been depleted by the mortgage payments. My question is this -- at what point does one walk away from a property such as this?  My concerns are that there are no reserves so that any repairs that may arise will come from my pocket.  In addition, there is light rehab work (painting, blinds, etc.) estimated by my management company to be about $2800 to get both units rent-ready. I'm tempted to cut my losses at this point. I've had multiple calls from investors looking to buy, though I expect some low-balling. I'd appreciate any wisdom that can be shared or thoughts if you've been in a similar circumstance.  Thanks in advance!

Chase Busick · Answer

@R Miles

This is a difficult one. I've been told by some people with 500+ rentals that you can always come back from a loss by holding it long term & making it work during the interim. LTR's are usually the most predictable way to build wealth over time because of all the different variable benefits. If you can make it work, I think it'd be worth keeping as long as ongoing operations are good. I'd ensure that the PM company is doing solid work with repairs & tenant screening.

Being forced to sell assets like property is not ideal unless if absolutely have to. Sacrificing some of your personal money & making payments is doable, & chatting with your CPA may be a solid option to carry over losses. Forced sales are Usually not great, and considering what you mentioned about the potential deflation in your asset value makes it seem like you'll lose additional money after factoring all the additional costs in with selling.

Your IRR & ROE is probably suffering & could allow you to come out & get into something else more conservative. Always attempting to hold out is good, but it'd involve sacrificing & being prudent with your money. Investing involves risk & I'd chat with a lot of local people as well in order to make the best decision.

Jules Aton · Answer

I’m sorry it happened like this and suspect you fell prey to the rah-rah I constantly see here of buy multi-family in crap neighborhood with inflated cash flow projections somewhere in the Midwest. Predatory if you ask me. Even at $350 a month net that is only $4,200 a year. Not worth tying up your money, the hassle or liability in my opinion. Personally I would sell it and try a SFH or townhouse in class A neighborhood next time. You would be surprised at how much easier it is when your tenants have money and the properties actually appreciate. Hang in there and best wishes with whatever you decide.

Denise Supplee · Answer

Hi @R Miles I'm sorry you are going through this. A good test is to ask yourself whether you would buy this same property today knowing everything you know. If the answer is no, selling isn’t quitting, it’s reallocating your time, energy, and capital into something that fits you better.

You could make the light repairs, get it rent-ready, and stabilize it again, but if that idea feels more like a burden than a strategy, it may be the right time to move on and put your resources into a cleaner, higher-performing opportunity.

Aaron Zimmerman · Answer

This is a very nuanced question. Personally, when I'm investing, I'm always thinking about return on hassle as a nonfinancial metric.

here's how I would think about it :

1. What's the tenant pool like in the area? Were the two marginal tenants anomalies or is this representative of the overall potential tenant profile?

2. What kind of area is the property in? Class A, B, C or D? If it's D then might be worth selling. Class C would be more case by case and class B and A should be able to recover those equity losses.

3. Is it possible You've not hired a great property manager? Having a unit be vacant during a prime leasing season is fine but to not have it filled is a red flag.

4. How much in personal reserves do you have? $2,800 in the grand scheme of investing is not that much. I know it seems like a lot now in a period of no cash flow but it could be a lot worse.

I had a somewhat similar situation to this. I had 3 move outs in one year. One unit was $3k to fix up, one unit the tenant had been there for over 10 years and cost about $8k, and the other unit the tenant had to be evicted (took 7-8 months) AND I had to pay $20k to fix up the unit. Now, the property cash flows very well and I'm glad that I kept the property.

When bad things happen, you have to zoom out a little bit. Will this matter in 2, 5, or 10 years? Will you be glad you kept the property (if you choose do so and it makes Sense)?

Theresa Harris · Answer

What area is the property in?  Is it in a good neighbourhood or one where you are likely to attract lower quality tenants?  Sometimes you have bad luck, other times it is the type of property that attracts bad tenants.

Most of the time you aren't going to get rich quick with rentals.  You may make a bit each month, but the long term gain is the tenants paying down your mortgage and house prices going up.  If it is in a good area and you decide to give it another try, have a hard talk with your PM and find out what they are doing that they've had a vacancy for over 5 months-that is not good.  I might also look for another PM-a 5 month vacancy and an eviction is not a good sign.

You really need to ask yourself how much you expect to make each month and if you could sell the properties and invest that money elsewhere with a better return.  With the current market, you might get further ahead selling it and putting the proceeds in a high interest savings account.

Ashish Acharya · Answer

Hey R Miles! You’ve already gotten some great feedback here. I really liked what Denise said about asking yourself, “Would I buy this property again knowing everything I know now?” That’s such a grounding question. And on the other hand, Chase is right too, sometimes holding on a little longer pays off because neighborhoods improve, rents bounce back, and real estate typically recovers over time. It really just comes down to what you can handle right now and what your long-term plan is.

From a tax standpoint, here’s the simple version: selling might actually help you more than you think. If you’d truly be selling at a loss, that loss is generally deductible. It can offset other rental income, passive gains, and in some cases even a bit of W-2 income if you actively participate. If you keep the property, you can still deduct the vacancy, eviction costs, and rehab, but you’re also footing the bill. That’s why I’d definitely run the numbers with your CPA. Make sure you’re taking advantage of everything you can and see what your actual gain or loss would be. If you’re not really taking a loss, you could even look at a 1031 exchange to move into something that fits you better without getting hit with taxes.

So really, the tax tradeoff is this: selling now could lock in a helpful deductible loss, while holding could help down the road, but for now keeps deductions coming, but also keeps draining you. Getting those numbers side-by-side will make the decision a lot clearer and hopefully a lot less stressful. Happy to connect.

Basit Siddiqi · Answer

You mention having a PM, have you found out why there are so many tenant turnovers? Is there something the tenants don't like? Is it fixable?Have you tried using a different PM company if this PM company is not performing well?Losing $8,000 to $10,000 in value on a property is a 'rounding error'.A property can easily gain or lose $10,000 in value if you consider inflation.I would only be concerned if the fundamentals of the city have changed from the time of purchase.In the future, I would not buy a 1/1 and 2/1 duplex. At the very least, you want 2/1'sA 1/1 within a multi-family will normally attract a transient tenant(someone who will stay a few years).

Michael Smythe · Answer

Where is the property and is it Class A, B, C or D?

John Morgan · Answer

If you bought it in 2023 you’re probably going to take a big loss if you sell. If you think the area has potential, I’d lower the rent so you can find good quality tenants. I list mine $100-$200 under market rent so I have several good applicants to choose from. Turnovers within a few years crushes profits. List it lower so you have more people to choose from. I’d keep it for at least another year or two, even if you only break even by lowering rent and paying a lot for a couple turnovers now. Then regroup from there. Market rent will come up quite a bit over time so hang in there. I bought a few in 2022 and 2023 and dealing with the same thing. No vacancies but values softening quite a bit and a couple evictions. Good luck!

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