Please suggest : Apply for HELOC or Sell the Rental property

[Kiran Vemula]

Hi All, I have a newbie question.

I have a town house in Jacksonville, FL. I lived there for 3 years, It’s my rental property (1 +Year). November 2021 it will be 5 years since I own the property. Now the property has appreciation, If the tax rules didn’t change, I think I can get proceeds without tax (minus 6 percent agent commission and closing cost).

My long-term goal is to own rental properties for cashflow and live on it.

This property doesn’t give much cashflow, Last year I spent around 6 thousand for HVAC.

My question is, should I sell this property and eventually build the rental property portfolio with BRRRR strategies or Get HELOC to build rental property portfolio. Please suggest.

Numbers are below

House type: Town House, 3 bed, 2.5 bath, 1636 sqft

Year Built: 2007

Purchased: 175,000

Mortgage Balance: 138,000

Zillow Zestimate: 257,000

Interest Rate: 3.625

Rent per month: $1625

Mortgage (PI) per month: 760

HOA per month: 200

Taxes per month: 308

Insurance per month: 62

Cash flow = $1625 – ($1330 + CAPX + Maintenance)

Not sure how much percent I should calculate for CAPX and Maintenance.

I don’t have property management company, If I include that also it will be negative cash flow.

[Brendan Miller]

@Kiran Vemula I just did the same, sold a luxury condo that I used as a primary for 2 of the past 5 yrs, and rented for the last 3. It had a high HOA so it didn't cashflow well but it had appreciated a lot since I bought it. I recently closed on it and plan to roll the proceeds into a down payment on a multifamily property. You're in a good market, so I'd recommend doing the same and find a property (or several) that cashflow well.