Should I sell my rental property?

Question

Brandon L. · Answer

@Brett Van Leeuwen we are not at the top of the market in my opinion, so I would keep it for at least 3-5 more years.

Kevin Siedlecki · Answer

@Brett Van Leeuwen

Keep your goals in mind! Is there a reason your goal of having it paid off and using it to pay for your kids' college education is no longer attractive enough? If the tenants are working out, the house is in good shape, and cash flow is your goal, then keep it.

True, you could sell and grow your portfolio, buy a few properties with the proceeds, but that means a lot of work finding and managing those other properties. Right now you have a safe, predictable income that helps you achieve your goal. If you want to change your goal to a growth goal, then do that, and act accordingly and deliberately. If you're going to sell, do it because you have a new, better goal than having that house send your kids to college.

Anthony Angotti · Answer

Hey @Brett Van Leeuwen,

What kind of appraisal was the one for $300,000? Was this an appraisal for sale or a HELOC appraisal? Sometimes they are a bit different (even though they shouldn't be).

In any event if you goal is to acquire more properties I'd go for selling it and turning one sale into 2 or 3 new rentals. If not then I'd keep paying it down and have a free and clear rental. Free and clear rentals are nice for those that have them. Not as much stress in my opinion.

If I were in your shoes though I would sell and then buy a few more, but that's because I'm trying to scale up. As many have said. It all depends on what your long term goal is.

Kevin Siedlecki · Answer

@Brett Van Leeuwen That sounds like a great decision. You get the best of both worlds, as long as it's still going to cash flow. Don't overanalyze and talk yourself out of it. Just do the math to make sure you're still cash-positive, and pull the trigger!

Patrick Britton · Answer

@Brett Van Leeuwen   Nice to be in such a good predicament :-)

Without getting into the details too much (most of which you have already covered in your last post) it seems that the better choice of action would be to keep the property.

There is only one other person here who mentioned the most important question of all which pertains to the opportunity costs.  Even if you could sell the property and net yourself a good chunk of change, where does it go then?  Looking at this thing from 30,000 feet, you are in a pretty good position: cost of financing is historically low, you have enjoyed some nice forced appreciation, you are cash flowing very well, and although you have said nothing about the tenants themselves, it seems to be that they are not an issue or problem.  Why spoil a good thing?

As a former certified financial planner and investment advisor, (now a realtor working with investors only) I will tell you that there is no "best" answer.  There is only a "best" answer with respect to your specific investment goals.

I must also add that just because someone says they are real estate investor, it does not mean they are any good at it.  After all, there are good doctors and bad doctors, good lawyers and bad lawyers, good mechanics and bad mechanics, etc.  The same applies to the real estate investor.  Stating that one is a real estate investor is not the same as being a good real estate investor.

Mary Kay Robinson · Answer

What a great situation to be in!  For me, both as an investor and a Realtor, the question should be viewed from an opportunity cost standpoint and ROI.  If you did cash out - you would see a nice profit BUT you would have to put the proceeds to work and at least meet or preferably exceed the return you are currently getting considering both short term and projected long term returns.  It's not a question of where you are now and the gains you have realized, but what you want to create in the future.  I would first sit down with your tax adviser and look at all those options and the tax implications.  Then consult with a Realtor to see what else is available for investment and see if it can exceed the returns you have now and for the foreseeable future.  Armed with that information, you will be able to make the best decision for you and your family.  Happy to discuss further is you wish to pursue that route.

Tim Cornwell · Answer

Brett,

I'm here in Bellingham and am familiar with the market. I'm a real estate investor and a real estate agent. I have bought, sold, rehabbed, owned and developed land in Bellingham. I currently own and manage a 6-plex on D St. Happy to share a cup of coffee w/ you to talk it through. I'm a good listener and sometimes just thinking out loud opens a pathway to the solution.

Tim

Should I sell my rental property?

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