Should I sell my investment property or keep collecting cash flow

Question

Eliott Elias · Answer

You will make more like 35k after realtor fees and capital gains. Depends on your situation, but long term cash flow trumps flipping. I would keep it rented, take advantage of the tax benefits and do a cash out refi.

Sam Yin · Answer

@Eliott Elias

Ditto. Unless you have an upleg to exchange to right away, I would not sell it. You would lose too many tax benefits and they money will quickly disappear.  Your tax benefits out way your  sales gains at this point in time.

If you were to come out with $100k or more, then may be the balance will shift.

But if you are tires of REI, then it makes sense to cut out and run.

We (the forum) do not know your vision or goals, thus all answers are speculative and based on Poster's goals.

John T. · Answer

There are a few factors that you should consider when deciding whether to sell your property or continue to hold onto it as a rental.

• Potential capital gains: If you sell the property for $250,000, you would net a profit of approximately $50,000 after subtracting the purchase price and any selling costs such as real estate commissions and closing costs. This is a one-time gain that you would receive upon the sale of the property.
• Rental income: If you continue to collect $1,250 per month in rent, you would net approximately $9,000 per year in rental income, assuming that your expenses such as property taxes and insurance are covered by the rent. This is an ongoing stream of income that you would receive as long as you continue to own and rent out the property.
• Future appreciation: It is also possible that the value of the property could increase in the future, which could lead to even greater profits if you decide to sell at a later date. On the other hand, if the value of the property were to decrease, this could potentially reduce the profits you would receive upon the sale of the property.

Ultimately, the decision of whether to sell or hold onto the property as a rental will depend on your personal financial situation and your long-term goals. It may be helpful to consult with a financial advisor or real estate professional to help you evaluate your options and make an informed decision.

Brooks Rembert · Answer

@Ferdous Hussain, how much money do you personally have in the property?

One way many good investors make these types of decisions is based on the Return on Investment.

For example, if you paid cash for the home and you make $9,000 a year, your ROI is 4.8% (9,000 / 187,500)

But if you put, say, 20% down or $37,500, then your ROI is 24%.

Big difference.

If the home is really worth $250,000, you can refinace it at a 75% LTV which gives you mortgage of $187,500 and this should mean theoretically you would have $0 in the house so your ROI is infinite, because you make money, yet would have no money in the house at all.

Does that make sense?

Should I sell my investment property or keep collecting cash flow

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