To Sell or not to sell……

[Murtuza Khoja]

Hey everyone,

want to thank everyone so far on this forum as I've received some very helpful advice.

would like to get everyone's thoughts on our situation.

For context, we're Canadians who bought a long term rental property in Winter Garden, Fl in 2014.  It's a 2006 build.  We're on a 15 year fixed rate mortgage at 3.5% (amazing by today's standards, I know), and we will be mortgage free by 2029 on the property.  We have had that year in our mind's eye, and looking forward to the day that we could collect decent cash flow on it.

However, over the years we've seen the cost of home ownership in central Florida increase quite dramatically.  Homeowners insurance is super expensive;  we had to replace the roof last year and while insurance covered some, it was still a big chunk.  I'm just having to replace one of the 2 AC/Furnace units at $6500, soon to be followed by the other I'm sure.  And I just thought that soon I'm probably going to have to replace the windows in the next  5 years.

we Had thought about selling in the past, but With the transactional cost, we didn't bother, And seeing freedom from mortgage payments on the horizon, we thought lets wait it out until then.  But given the age of the home, I'm wondering if that was a mistake.

And just an FYI, since we are Canadian, and this is not our primary residence, banks will not give us a line of credit or equity that we can pull out to make another purchase.

We also really love Florida and visit there multiple times a year and end up staying in Airbnb's/resorts.  We are total Disneyheads, but when we bought the property we didn't have kids and didn't come down as much.  After having kids we find ourselves going there a lot more.  Usuallt 3-4x /yesr, which Has made us wonder if we should've bought a short term rental from the beginning, And are wondering if we should sell and buy A short-term rental that we can use when we go down (We typically go off-peak, Kids are young enough to just pull them out of school lol).

im Kind of wondering if we should just sell before our windows need replacing, and then buy a STR property all cash. I would estimate we would have about $400,000-$450,000 USD after all expenses and capital gains paid both sides of the border.

So after this rant, I'm just wondering what would you smart investors do?

Would you wait until the mortgage is paid off and reassess?  

would you sell and buy something newer?  
If so what kind of property would you buy? Any place/area where we could get a good deal on a STR that's rentable but good for our own use as well?

Appreciate your thoughts.

thanks!

[JD Martin]

I own a house in Four Corners that we do just what you want to do. Just know that you are almost guaranteed to have to subsidize the place, even paying all cash. There is a ton of inventory and nightly prices are depressed. We have excellent ratings, premier host status etc and don't come close to covering costs of the house. Same as you, we utilize it, and probably like us (because you are from Canada) you're going to use it at the times when you'd stay most booked and bring in the best money, which is Feb-Apr. 

You'll come closer to breaking even by paying all cash, and there's a lot of properties out there so finding one should be simple, but just be realistic in that you're going to end up subsidizing the property even without a mortgage.