Cash Flow for my property ...... Good or Bad

[Mike Lynch]

Hi,

I did the four square method last night on my property. Please let me know if this is correct? I might be able to get $1500.00 per month for this property, so lets say $1500.00.

Rental Income = $1500

Vacancy = $100.00

General Repairs = $100.00

CapEx = $100.00

Mortgage = $760.00 ( Includes Taxes and Insurance in monthly mortgage )

This is all of the overhead that I have now.

Income - Expenses

$1500.00 - $1060.00

Cash Flow = $440.00

We owe $39,000 on the property. 3 bed / 2 bath / 1385 sq foot home. Property worth about $240,000 - $260,000 today. ..... Mortgage started out at $107,000. Interest rate is 3.62

The home has a new roof, new appliances, new plumbing. Since it was built in 1978 the layout style is dated looking, but nice and clean Ranch Style.

Still trying to figure out whether to Rent or Sell? What do you think? ...... What would you do?

[Chris Svendsen]

Quote from @Mike Lynch:

Quote from @Joe Villeneuve:

Sell, sell and ...sell.  You have over 200k in equity wasting away.  You should be able to take that 200 and use it as a 20% DP getting you 1M in PV...not just 260k...and, you should be able to at least triple that 440/m CF...easily.

 I am actually a plumber.... I don't know some of your lingo. What is 1M in PV? ... Lots of people comment on my posts but sometimes I do not know what they are saying. ... Sorry, but I have not been in this game and need to be talked to like a kindergartener. :)

 What he is saying is you can sell, take 200k profits and use it to buy 1 million dollars worth of property.  This could be done through various types of properties.  Assuming this has been your primary home you can sell and keep all profits tax free to invest in something else.  

if was a year ago I would say do a cash out refi mortgage to 200k since rates were almost 3 percent, rent it out and then take the extra money from cash out refi to buy more places but rates are pretty high so may not be worth it now. Could also get a HELOC on equity to use to buy a some more homes but right now you sell you basically get the money completely free to invest in something else.