Should We Sell or Hold our former home?
Hello BP! First post (hopefully first of many).
So I am helping my parents take care of a property that now serves as an investment property in New Jersey. We initially bought it in 2005 and lived there till about 2014, at which point we moved to our current residence. Have been renting it out since then. Now we are considering moving on and selling it but as I want to consider real estate investment in the future, wanted your opinions on whether it may be worth a hold or not!
Details
Purchase Price - 330K
20% down + another 15K (probably more) put in for improvements
Total Expenses - 11200 annually (Tax, Insurance, Maintenance, Advertising)
Rental Income - 25800 Annually
Cap Rate - 4.4% (if I did this correctly)
Cash Flow - 3600 annually based on 20 year Mortgage
Very VERY new to all this so appreciate any input.
Initial thoughts were that I generally see cap rates around at least 7-8% on here. And quick search of cap rates around Jersey suggest as much or more. My thinking was that parents can hold if its a decent investment but would rather be free of the hassle of having to care for it at this point. I am leaning towards telling them that they should probably sell it with the way the market has trended up, the seemingly "meh" returns, and their want to be hands off. But I again wanted your opinions so that those more experienced may correct me if my calculations are way off!
Thank you
-Mrinal