My wife and I are currently househacking an up/down duplex, which we purchased last Nov. We also rent out our previous residence. Our long term goal is to acquire enough rentals so we can retire early. How early that will end up being is still vague, we are only a few months into this. We are seeking advice on selling or keeping our old house.
Our old home, which we now rent out, is a 2bd/1ba near the downtown area of our small city. I bought it as a bachelor pad 6 years ago, and now have around 25k in equity. 2/3rds of that has come from appreciation and the remainder from paying down principal. Like I said in the previous paragraph, we are looking at buying more rentals in the future, so you may be asking why we would want to sell this one. The issue is although it is a two bedroom, the 2nd bedroom is actually a former tuckunder garage, it has a door leading to the outside, no bathroom in the immediate vicinity(the bathroom is located next to the master bedroom upstairs), and is the only access to the utility room. This, at least in my opinion, makes it a poor rental.
We also have an issue of needing a new furnace in the next few years. The house is currently heated by district heating, which the utility is shutting off July 2020 due to cost. My wife wants to sell the house this summer/fall, as the furnace problem won't be nearly as big of an issue for most people compared to selling it closer to the shutoff date. That being said, we have a great tenant in there right now, who's lease is up August 1. Originally he was going to be moving to school in the fall, and I would have had no problem putting the house on the market at that point. However, he's staying another year and told us he'd like to sign on for another year lease, which I have no problem with.
As it stands right now, the house cash flows us right at $200/month. I'm hesitant to let go of that, but selling would free up a decent amount of equity (in our market, I know 25k isn't much in most areas) to make a decent down payment on another multi-family, which is what we ultimately want to do with our REI careers.
So BP, should we sell now, sell next year, or just hold on to it? Or is there another option I'm not tinking of?
Thank you for any and all responses!
@Hans H. from the sounds of the property I would probably look to sell and then trade up into a larger property. I am, and have always been a value add investor, and I believe that trading up properties will make you a lot wealthier over the years than a pure "buy and hold" strategy would.