Would you hold or sell this duplex STR?

Question

Looking for advice on whether to keep holding or sell my Dallas duplex.

The property:

• Duplex with 2 1B1B units totaling around 1270 sq ft
• Lot size is around 5,000 sq ft
• 75208 zip code in a highly developing area 1 street away from Bishop Ave in Dallas (entire block has been or is currently being redeveloped into luxury apartments or townhomes)
• Zoned for mixed use development (planned development district 830 east garden)
• STR cash flows $500/month after property management cut and all expenses
• Paid $410k and put $96k down, currently have $30k in principal with $270k owed on the mortgage; mortgage rate is 4.125%
• Might need 2 new AC units within next 5 years, possibly a new roof in the next 10 or so

Duplex with 2 1B1B units totaling around 1270 sq ft

Lot size is around 5,000 sq ft

75208 zip code in a highly developing area 1 street away from Bishop Ave in Dallas (entire block has been or is currently being redeveloped into luxury apartments or townhomes)

Zoned for mixed use development (planned development district 830 east garden)

STR cash flows $500/month after property management cut and all expenses

Paid $410k and put $96k down, currently have $30k in principal with $270k owed on the mortgage; mortgage rate is 4.125%

Might need 2 new AC units within next 5 years, possibly a new roof in the next 10 or so

The situation & comps:

• Investor neighbor next door has listed their lot for sale for $550k and the lot is slightly smaller than mine. It could be far more appealing to a developer to acquire both their lot and mine together so I’m wondering if now is the right time to list mine, as well. Nearly all the other lots on the block have been sold and redeveloped already.

Investor neighbor next door has listed their lot for sale for $550k and the lot is slightly smaller than mine. It could be far more appealing to a developer to acquire both their lot and mine together so I’m wondering if now is the right time to list mine, as well. Nearly all the other lots on the block have been sold and redeveloped already.

• The closest comp is another duplex right across the street that is listed for $625k but has been recently renovated.
• If I were to list, I’m thinking low-mid $500s would make sense, keeping in mind that a developer would have demo costs so the duplex wouldn’t be an asset.

The closest comp is another duplex right across the street that is listed for $625k but has been recently renovated.

If I were to list, I’m thinking low-mid $500s would make sense, keeping in mind that a developer would have demo costs so the duplex wouldn’t be an asset.

Personally, there’s not a pressing need for the cash and we would park the funds in a low risk play for the time being. We aren’t interested in owning/acquiring more real estate. I don’t want to be shortsighted but the $500/month cash flow isn’t super motivating. Am I thinking about this wrong? If you were in my position would you sell or hold?

BJ Everson · Answer

Skye, one way to frame it is the return on the equity you'd free up. If it sold in the low-mid $500s with about $270K owed, you'd net very roughly $210K-$240K after selling costs. $500 a month is $6,000 a year, under 3% on that equity, before principal paydown and appreciation. Your 4.125% loan helps, but the real comparison is that number against what the cash would earn in your low-risk option after taxes. Two other things I'd check: ask your tax preparer about depreciation recapture and capital gains on a sale, and ask a land or commercial broker whether a developer would pay more for your lot and your neighbor's together. If you both list separately, you may be competing for the same buyer.

Lauren Kormylo · Answer

FYI, if you hold it, two new ACs are going to wipe out about 1.5 years of cash flow or more.

Inder Singh · Answer

Skye, I'd lean hold — but only if you re-underwrite it as a business, not as a house you happen to rent short-term.

That 4.125% loan is the real asset here. At $500 a month, you're not really deciding about $500 — you're deciding whether to give up cheap leverage for a lump sum you'd then park elsewhere at today's rates. I run STRs in Revere and own 17+ units across five buy-and-hold deals, and the STRs that last are the ones where the fallback rent still covers the mortgage if demand or regulations shift.

Before selling, I'd get any developer interest in writing, price both lots together as a pair, and reserve for those two ACs and the roof — that's the capex that can turn a $500 month into a losing year. If the fallback rents work and you don't need the cash, hold it and let the cheap debt do the work. Happy to connect if you want to compare STR underwriting notes.

Noah Wright · Answer

I'd hold unless a developer pays for the pair at a price that beats what the low-rate mortgage and the monthly cash flow are worth to you. If you do list it, look at how the buyer is paying, because that decides how solid the contract is. A developer assembling both lots needs land or construction financing, and that lender will want an appraisal and plans for the project on the combined lots before funding, so offers come with long closing periods and contingencies.

Ask for earnest money that goes nonrefundable on a set schedule, and a firm date when the financing contingency ends. The short-term rental can keep running until those dates pass, so the real cost of a long close is the booking calendar, and you only stop taking bookings once the deposit is hard. Has a developer already approached you about the pair?

Rati Meskhishvili · Answer

@Skye White Srisathit

One thing to add to the return on equity math above. If it sells at around USD 525k, after about 6% selling costs and USD 270k loan, you would walk away with about USD 223k before taxes. If you hold, you get USD 6k a year cash flow, but you also pay down about USD 7.3k of principal a year on that 4.125% loan. So holding earns about USD 13k a year, or 5.9% on that 223k, not 2.5%-3%. If the two ACs cost about USD 16k over the next 5 years, it is about 4.5%.

So against a low-risk option at around 4%, it is close to a tie before any appreciation, and selling also triggers capital gains and depreciation recapture that holding does not. To me that makes the real question what a developer would pay for your lot now, especially together with your neighbor's property, versus later.

(I used AI tools to help run the numbers)

Denise Supplee · Answer

I don't think you're thinking about it wrong. I'd look at this less as “is $500 a month enough?” and more as “what is my money doing for me if I continue to hold it?”

You have a great interest rate, but if the surrounding properties are being bought for redevelopment, I'd want to understand what your property is worth to a developer today versus what you realistically expect it to be worth if you hold it another 5–10 years.

I'd also factor in the upcoming AC and roof expenses, taxes, insurance, management and the tax consequences of selling. If I didn't need the cash and there was a strong reason to believe the redevelopment around me would substantially increase the value of my property, I'd be tempted to hold. But if the developer premium today is significant and I don't have another reason to own this particular property, I'd seriously consider taking the money off the table. The numbers would make the decision for me not just the $500 monthly cash flow.

Andrew Steffens · Answer

This I think is a personal question. You are cash flow positive and have a good interest rate. Likely there is not much you can do to increase the return with out risking lowering it further. So the question is to sell it now and free cash for something in the future or hold out for increase value in the future due to development. The return on equity (an important metric many people miss) is quite bad at 2.5% so even if you buy bonds you can likely triple your return. Personally I would take the cash out and place it in a higher performing asset. You could net around $250k which can buy you a $1-1.2M property that in my market can create a 20%+ CoC return and still be appreciating, and possible tax benefits.

Eugenia Chetverechenko · Answer

Uff, tough choice! I can see why $500/month in positive cash flow isn't too exciting, especially with some potentially expensive repairs coming up.

What stands out to me is that your property's value may now be more about the land and redevelopment potential than the rental income itself. I'd definitely explore whether a developer would pay a premium for acquiring both lots before deciding on a listing price.

From a tax perspective, I'd also want to know what you would actually walk away with after selling costs, capital gains taxes, and the tax impact of depreciation that was claimed over the years.

Only then I would compare those after-tax proceeds against what you could realistically earn in a more passive investment.

V.G Jason · Answer

Why did you buy it originally?

Jules Aton · Answer

@John Racine It surprises me that you know so many who regret selling. I have sold more than a few over the years and am certain every single one has increased in value since but I don’t regret selling and moving on. In some cases I put the funds into stock market which is a truly passive investment and others to bigger or better properties.

Would you hold or sell this duplex STR?

Would you hold or sell this duplex STR?

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