Keep it or sell it?
Hello,
I am brand new member and this is my first post. I currently own a rental that used to be my previous home. Watched the 50% rule video and quickly put together my numbers to see where am I at.
My expenses are at 37% of the rent, excluding the provisions for long-term CapEx items. I'd say, I am pretty ok on expenses side even when factor in CapEx.
The issue is on the debt service side. P+I payment amounts to 96% of the rent. That is because the loan is amortized over 20 years. In the end, each month I am putting approx. $1000 out of my pocket to keep this property, and each mortgage payment adds approx. $1500 towards the equity of the house. So, I am making money each month, just not in my checking account.
In past 4 years, the house has appreciated nicely here in SoCal but now the appreciation seems to be slowing. The only reason I am in dilemma weather to keep this property or sell is because I am not sure if I am missing out on better opportunities with this negative cashflow situation.
Refinancing to a new 30 year fixed is not so appealing as my interest rate would go from under 3% to over 6%.
I'd appreciate different perspectives from readers and gurus on this forum.