Hello BP Community,

My wife and I currently own one rental property in the North Phoenix area and are looking to scale our real estate business. We purchased the property in 2020 as a primary residence and then turned it into a long-term rental in 2022. Prior to purchase the roof was replaced as was the water heater. During the time we lived there we made some minor upgrades/repairs- renovated upstairs bathroom, replaced carpet on 1st floor with LVP flooring, added artificial turf to the backyard, replaced pool pump, and replaced the HVAC system. We have had the same tenants since we leased it in 2022 and fortunately they have been great- minimal maintenance requests, very easy to communicate with, and pay on time.

We have a 30 year fixed mortgage on the property at 2.875%, the property cash flows about $1,200/month, and there is roughly $200,000 in equity in the property. My wife and I are interested in expanding to help bump up our cash flow to help at least one of us exit our current W2 jobs but are hesitant to do so given the current market climate. The rental property is in a HOA community that has a 30 day minimum lease term so converting to a STR isn't an option. We do have access to a HELOC on the property which we leveraged to purchase our current primary residence (balance borrowed has been fully repaid at this point) but we would rather not pull that lever to roll into a new property given current interest rates and the adjustable nature of the HELOC. We have discussed selling the property and rolling it into a multi-family but again feel like we may be trading a fairly hands off property with good cash flow for one that may be a bit more labor intensive and only yield marginally better performance.

Any advice on how to expand our rental portfolio/maximize its performance is greatly appreciated!