Howdy everyone,
I've got a rental property I purchased about 4 years ago in a college town. I used a VA guarantee to secure this duplex. I'm also a Texas RE Broker and represented myself as the buyer. At the end of the deal, I was out my appraisal & inspection. My "commission" would cover closing cost.
I lived in one side for a year, until my fiance and I got married and bought a primary home together. It has been rented out since then. After expenses, it cashflows about $300/mo, which isn't bad considering my initial investment. I've done some upgrades as well, but cost have been under $4k over the 4 years. I was in construction at the time, and did most of the work myself or had labor from work help for a few beers and pizza. We added a separate driveway so each side has its own now. HVAC was upgraded as well, landed a sweet deal on that, again, construction related.
I believe it's time to sell this property though. There have been some major city developments, including infrastructure updates, a revitalization of a mainstreet into an art district, and an abandoned golf course changing to a Big Shots (like Top Golf) and municipal park. Property values in that area have almost doubled because of these updates. I knew this going in because I studied the cities comprehensive plan thoroughly for a project I was working on in grad school. Between those revamps, and it being less than 1.5 miles from campus, it has appreciated a lot! As mentioned, I am a broker, so I ran a CMA and found that I could walk away with about $100k if sold today. Sounds crazy... But to make sure I wasn't being biased, I had a few former colleagues that still practice in the area, and they came up with even higher numbers.
The reason I think it is time to sell is because I want to see more cash flow. $300/mo is nice considering initial investment. But I feel like $100k of equity can be put to work providing much better cash flow. My wife and I want to start a family soon. I know once that happens, any investments I'm interested in will receive a hard brake from the wife. If I don't sell and find another one now, I will be stuck with this property for a few more years.
So I'm posting here, to pick yalls brain! No answer is the right answer, just seeing what yall would do in this circumstance. Sell and reinvest immediately into other assets (1031 Exchange)? Or would you continue to hold? Try and start a small land development deal? That is the ultimate end goal, but I don't feel $100k is enough! I can use a Texas Veterans Land grant to buy land, I think it's 5% down and you receive title (up to $150k 1-20acres). Gotta have a residence on it, but it doesn't need to be primary!
I am interested to see what others would do!
Thank you for your time!
