Should I use it as a rental property or sell it?

[Wakes Andre]

I have a property that I purchased a few years ago for $140 K now it costs close to $225 K. Currently, I use it as a rental property and it generates about $1000 per month after I pay

1. Property Insurance
2. Property Taxes
3. HOA fees

My question is should I consider selling it or I have good margins on it?

[Ali Boone]

Did you buy it for cash, which is why no mortgage payment included in those expenses? $1000/month after a mortgage or from paying all cash lends to very different cash-on-cash returns.

If you have a mortgage on it already, then I would say cash out refi the property and use the cash you pull out from that equity to buy more properties with cash flow. That's how you can ultimately snowball your returns--keep pulling equity while maintaining the properties under your ownership.

But if you paid cash for that property, that changes the game some because your cash-on-cash isn't nearly as high as if it's leveraged. But it's still an 8.5% return so not bad either. If you did pay cash, I'd definitely do the cash out refi then because then you'd have the full amount to snowball off into more investment properties!