Duplex in LoHi in Denver - Should we sell?

Question

My husband and I own a duplex in LoHi in Denver.  Currently we rent one side and live in the other.  Because of the crazy market in Denver and the desirability of our area, we have been approached by developers interested in our lot and by prospective buyers interested in income property.  We are unsure if now is the time to sell or hold.

Stats:

Collective purchase price: $657,500k

Estimated worth: $800k+

Collective monthly mortgage/taxes/insurance payments: ~$3k

Rental income: $2450/month

We are happy living in the house especially considering we are only paying ~$700/month to live in LoHi in Denver.  With the proximity to downtown we can walk to work in 10 minutes, hit any of the best bars and restaurants in town in a few blocks, and we have great neighbors living in million dollar homes on our street.

With real estate prices in Denver, we are unsure if it would make sense to "make hay while the sun shines" and get out of these properties or if we should hold onto them long term.

Please help!

Anna

Bill S. · Answer

Anna S. timing the market is a fools game. Perhaps now is the peak of the current market (which I don't believe) but in 30 years you will laugh at what you paid for the property and be very glad you still have it. If you want to buy more or move, do a cash out refi and take the funds to your next deal. For me I'm a simple guy, buy and never sell is the my preferred approach.

Jean Bolger · Answer

I agree. I think you're going to have a hard time finding something else that will suit your needs/wants so well with the proceeds from a sale. Yes, LoHi is hot, but so is everywhere else. If you could get into a place you liked that would take your monthly out of pocket down below $700/mo then it would make sense, but that's not too likely.

Anna S. · Answer

Thank you so much for the help @Joshua Meyers, @Scott Trench and @Jim Tiernan

I really appreciate you taking the time to weigh in on this and value your insight!

Jim Tiernan · Answer

I listened to a presentation by Lon Welsh, Founder of Your Castle Real Estate and First Alliance Title last night at ICOR. Those firms don't think there will be a slow down in prices for years. Bottom line, 50K people moving to Denver a year. Meaning we need to build 31K new housing units a year. We are no where near that number and won't be for years. Call Ellie Reimer at First Alliance title and ask for the "2nd Quarter 2016 Home Trends" report.

Scott Trench · Answer

I mean, my goal is to one day be in a situation just like yours. I'm buying properties around the urban core, hoping to inch closer to the city center such that my rental portfolio builds a ton of equity and produces tons of cash flow and allows me to live in LoHi, Cap Hill, Highlands, or something like that for free, in a beautiful building in about 5 years.

I'd be pretty happy in your shoes, and would be licking my lips for 2-3 years from now, when rents might well cover that entire mortgage payment.

Duplex in LoHi in Denver - Should we sell?

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