New member seeking advice - hold or sell?

[Brett G.]

Hello,

I am a new member looking for your advice on whether to hold or sell my duplex that I've owned for three years; I really appreciate any advice you can provide.

I paid $160,000 (3.5% down, 30 yr fixed mortgage at 4.75%) and used 5k of the first time homebuyer tax credit of 8k to put right back into the property. This allowed me to get the bottom unit rented for 650/month. I have raised rent each year and it now rents for $700/month (will raise to $725 this Dec). I have been living in the top unit with the intention of completing the rehab, refinancing to remove PMI, and then moving out and renting the top unit. The problem is comps are now in the 140's - 150's range and I doubt it will appraise at ~$185,000 (allowing me to remove 70/mo PMI) even with the completed renovation. I still need to put a kitchen in the top unit among other things with an estimated cost of $8,000. So, my question is: do I sell and bring about $8,000 to the table, or do I invest $8,000 into it and complete the rehab and rent it out for ~ $1,500/month? It would cash flow at 1500 - (1165+120) = 215/month assuming zero vacancies and zero maintenance. Other details are as follows:

- $160,000 purchase price with 3.5% down

- $145,000 30 yr fixed mtg @ 4.75%

- $70 monthly PMI (included in mtg pmt of 1165)

- $1,165 PITI & PMI, $120 sewer/trash monthly expenses