I own 3 properties in the city that I live in. 2 Duplexes I rent out and 1 single family home (my primary). My net cash flow on the two duplexes ($2,150/mn) more than covers the mortgage on my current home ($1,750/mn). So essentially I am living rent/mortgage free while I maintain the 3 properties. (taxes and insurance included in all quoted payments)
Both Duplexes have appreciated nicely since I've purchase them. I could sell them both right now and my net proceeds would be enough to payoff the mortgage on my current primary residence. If I did this I would then have to pay my property taxes and insurance out of pocket (~$650/mn), so my cash-flow situation would worsen, however I'd be eliminating $625,000 of debt from my balance sheet and be left with a free-and-clear primary residence. I have about $120,000 of principal invested in the 3 properties, not including the rental profits from the last 4 years.
The rental properties have been great and I've had very few issues while having good quality tenants. But with the valuations being so high, and economic uncertainly potentially on the horizon the idea of shifting to a much less risky balance sheet is intriguing. My long term plan was always to rely on those two properties to provide reliable cash-flow to my FIRE master plan, but parlaying a $120k total investment into a free-and-clear $350,000 home is cool to.
Duplex 1:
200K loan @ 4.875% - $1,650/mn mortgage
Gross Rent - $2,800
Net Rent - $1,050 after utilities
Estimated Value $325,000
Duplex 2:
175K Loan @ 4.875% - $1,500/mn
Gross Rent - $2,700
Net Rent - $1,100
Estimated Value - $310,000
Primary:
250K loan @3.00% (ARM adjusts 1/1/2023)
$1,750/mn
Estimated Value $350,000
My gut is to continue renting them, but I think its an interesting case study and am curious to see what others think.
Other data points:
35yo
$0.00 other debt
$300K - IRA+401k
$50k - cash
2 other rental properties, $24,000/yr in NRI combined