When to sell an investment property? (Honolulu, HI)

[Sean Sakaida]

Aloha everyone! 

I'm a newbie investor from Honolulu, HI. I was wondering if I could get feedback in a property I own.  I have a condo that I've had for some time. It would be paid off in about 12 years. The thing is that I'm not making money on my condo right now. I'm negative about $120 a month! At that rate when my property is paid off I would be paying out of pocket a little over $17k for the life of the loan. When paid off free and clear I stand to cash flow about $900 though. So not sure if I should hold out for 12 more years or if I should sell it. The real estate market in Hawaii appreciates about 1-3% annually. So I could be looking at big appreciation down the road. It just hasn't appreciated much until lately. Since the market is hot right now in Hawaii, I'm wondering if selling for a small profit. Then use the profit to buy rental property in the mainland. I'm currently under contract on 2 properties in Cleveland OH.

[Royce Talbo]

@Sean Sakaida Why dont you refi into a 30 year? With rates still low you will start cashflowing immediately.  To me it doesnt make sense to be negative just so that you can be 0 debt and cashflow in the future.  Remember there is good debt and bad debt.  You could probably even refi and cash out a little to get some down payment for other properties without going negative.  The reason to refi into a 30yr is so that you have the options to cashflow, break even and pay off a little longer than 12 yrs, pay the same amount you are paying now and pay off in 12 years, or break even and take a little cash to purchase another property.  My personal opinion for Oahu is to never sell unless it is to buy a better property.