Not sure what to do - looking for RE advice
We own a LTR that is valued at about $215K, and we owe around $65K on it at around 4.5% interest rate. The taxes, however, have went up so much that we have to raise our rents to a crazy amount (~$1300) to break even. We are thinking about selling the LTR and doing a 1031 with the proceeds to purchase an STR in the Smoky Mountains. We would probably finance around $400K but at 8%. Would you (a) just keep renting the LTR given the current market; (2) sell the LTR and do the 1031; or (3) something else (maybe wait until interest rates drop) I haven't thought about yet?
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@Michelle Artmeier Surely your SFR is cash-flowing great at a 4.5% rate? If rents are at $1300 per month it tells me it's a nicer C/B- class neighborhood in Indy, but maybe I'm wrong. We have SFR between $900 and $1150 per month and they all cash-flow.
Why sell a performing property in a growing market just to get into a STR in the Smokies? Have you researched that market much? You're going to find it's saturated. Tons of discussion in the forums about it. Financing $400k at 8% in a saturated market doesn't sound very appealing to me. Outside of personal use and enjoyment, from an investment prospective, I don't see the angle. I'd need numbers to justify the 1031 exchange and new strategy.