Sell Property or HELOC?
Hey Guys,
I am needing to get liquidity out of a rental property to use for starting a new business. I am torn between selling it or getting a line of credit to get the cash that I need out, and need your opinions on what route is best.
The house can sell at about $170k, I purchased it for $105k, and have $96k left on the mortgage. My expenses on the property are $1,400/month, and I currently have it leased for $1,600. So making about $200 cash flow per month.
If I sell it I estimate I can make about $60k after all realtor fee's/title fees/etc. However, I would need to pay taxes on that gain which it has been a rental property for a little over a year now. So I believe the tax rate would be 15% for that $60k gain + the depreciation/tax deductions I took for 1 year?
Or, I can get a HELOC and skip the taxes. But I don't think that it would get appraised at $170k so the equity may be less, and since my margin on cash flow is low I may be in the negative.
I appreciate any other ideas and your opinions here!