Sell this condo, right?

Question

I purchased a condo in Portland, Maine with cash five years ago for $155K. It's worth $280K today. The appreciation has been great, but it feels like it has run its course.

Rent is $1550. Expenses are an HOA fee of $313/month. It's a very nice unit in a great location (A-/B+) in an attractive, well-run building. Super easy to self-manage. I have always had problem-free tenants, only been vacant for 1 month total and maintenance has been extremely minimal.

If I did a cash out refi I wouldn't even break even.

Should I sell it and 1031 into something on which I can generate more cash flow? And if there are any Mainers here, any recommendations for markets in Maine with more attractive cap rates and appreciation outlook (not interested in out-of-state investing)?

Cody DeLong · Answer

Sell it, Portland is hitting its PEAK!  Lewiston/Auburn has a lot better Cap rates buying off market.

Cody DeLong · Answer

@Quinn Martin Augusta and Waterville also have a better chance of getting a good cap rate as well. Waterville is booming and the next 5-10 years if it stays on the current path will be huge.

Quinn Martin · Answer

Thanks!

Quinn Martin · Answer

@Tyler Bushey Thanks for sharing that research note. Lots of useful data points!

Quinn Martin · Answer

@Russell Brazil Point taken!

Quinn Martin · Answer

@Cody DeLong thanks for the feedback and the Lewiston-Auburn idea. Any view on Augusta?

Rob Milliken · Answer

I believe what Cody is saying is that you can purchase properties at a lesser amount in Lewiston /Auburn area where it is in need of rentals, so there for his cap rate could be higher

Tyler Bushey · Answer

Here's an article that may give you some help making your decision....I haven't read it, just stumbled across it the other day.

https://vitalius.com/blog/article/2019/3/21/vitalius-real-estate-group-releases-annual-portland-condo-report/

Russell Brazil · Answer

There is no such thing as a cap rate being better....or worse. Cap rate is indicative of the underlying risk in the asset and or market. Neither higher or lower is better or worse.

Sell this condo, right?

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