My husband and I have several rental properties. Some multi-family, and two single family homes. With the market how it is I am wondering if we should sell the single family homes? In the location they are in, homes are going above asking with multiple offers the same day.
Purchased in 2017 for $55,000 and put $5,000 of repairs into it. Currently rents for $860/mo. Recently the tax assessed value increased by 40%, from $87,000 to $125,000. I'm thinking it would sell for $130,000 or so. Loan is about $40,000 at 4.5% interest
Purchased in 2019 for $42,575 and put $5,000 of repairs into it. Currently rents for $825 but could probably get more. No loan on this property. Could probably sell for $110,000.
The first question asked might be "what will you do with the money?" My husband and I are looking for a farm to purchase and to move closer to my parents and build a house on said farm. In a perfect world, we would be able to do a 1031 exchange into the farm property but it seems almost impossible for the timing to work on this. I likely would not buy a different rental property with the profits because the market is so inflated currently. So I guess it's possible we could sit on the money until the real estate market crashed then buy something cheaply like we did with these.
Any thoughts? Or just keep going as is?
@Virginia Jones if it were my dilemma I would just continue renting the existing properties which seem to be carrying themselves. On the other hand if I wanted the farm and needed to sell to make it happen I'd be inclined to do that. But I am sure you can figure out a way to have your cake and eat it too?
I wouldn't sell all of the rental homes you have accumulated for the farm. I'd use the equity and pull out a HELOC. Start flipping and use the profits for the farm. You can start BRRR'ing for it. I'd be patient and continue to build some wealth then do it.