Should I sell my rentals?

[Brandon Cox]

I have two rental units side by side in a college town - Georgia Southern. They are 4 bedroom, 4 bath, and they share the common spaces. They met the 1% rule when I bought them and I couldn’t find much at the time that did. I paid 167k each and I did a 1031 of about 50k in gains and split it. I know I’ll have to pay taxes. Some may disagree, but I did 15 yr mortgages so they would pay off when my kids start college. As it turns out, I’ll probably have enough in 529s within a year or two so that isn’t a realistic goal any more.  I’ve owned them 2.5 yrs.

They have always made me nervous, but even on the 15 yr mortgage, they continue to cash flow. I had been worried about overbuilding there, since I bought mine brand new and they kept going up. Rents have basically stayed steady. Now covid. Building has stopped, I can get 220k I think, and they would no longer meet the 1% rule. Not sure if they will ever come close. Considering pocketing 100k each on them minus the taxes. Should I sell?  

Thanks in advance 

[Will Gaston]

@Brandon Cox I primarily do student rentals and I care very little about the values of my properties. I very much care about the likelihood of keeping them leased.

I think you should strongly consider whether or not you can continue to rent the properties at/near where you're renting them now for the foreseeable future. 

Don't underestimate the recession resistant nature of student rentals. Lots of people weren't paying rent in 2008-2011. Almost all students were.