Rent or Sell NEW Duplex

[Wade Stahle]

I recently just built a new duplex and cant decide whether or not to rent it or sell it. I own the 3 pieces of land around it so I could build 3 more. Here are the numbers.

- built for $180k

- appraised at $255k

-  Rents for $1150 a month (tenant pays all other utilities)

- all in mortgage is $1179/month

How do you decide whether or not to take the cash out now or later? Does someone have the math to justify which option is better?

[Ben Sawyer]

Congrats on your winning investment.  Hold or Sell seems like it would depend on your long term goals, interest to be more active or passive in your investing, and your cash/debt situation. 

My decision points would be based on the following:

- Are you interested in lump sum cashflow now or building equity/wealth for later collection?

- Do you want to be a landlord or a builder? Would you prefer working on tenant acquisition and management or home building and working with contractors? Or would you eventually hire a property manager (impacting cashflow)?- $13K per year cashflow (passive income) versus around $50-60K cashout from sale after expenses (more active income).  Takes only 4.5 years or so to meet breakeven point for this equation.  Rental option has additional value later on assuming same $50-60K equity plus potential appreciation plus principle paydown plus tax benny's minus eventual capital expenditures

- How would you finance properties 2 and 3?  Do you need the cash from liquidation of the first property by either refinance or sale to do properties 2 and 3?  How does this impact cashflow of property 1?

- If you were to sell and roll out the other 2 properties, what is your next opportunity? What would you invest the combined proceeds into next? Could you find another investment with the rate of return you could get from these duplexes as rentals? Do you have the opportunity to continue the $50-60K duplex cashout equation with more acquired land?

These are the questions I would be asking myself.  Don't think we can answer any of them for you.  It also doesn't have to be all one or the other.   

Good luck with your decision.