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Learning, Sharing, and Teaching => Real Estate and Landlording => Topic started by: on April 12, 2021, 05:49:07 PM

Title: Decision to sell rental property
Post by: on April 12, 2021, 05:49:07 PM

I have owned a townhome rental for almost 6 years. Single tenant with 100% occupancy.
This year we are contemplating selling it but need some opinions around it.

Bought 6 years ago for 123k
Down payment 23k
Outstanding loan at 4% 86k
Current Zestimate 185k
Depreciation taken so far 20k
Repairs made 10k
Net cash flow without vacancy $3500 (based on current year, was little lower previously. )

First off we donít really need the money but I feel it can help pad up our stock portfolio.
Together we are in the 22% tax bracket.
Between depreciation and  capital gains I am not sure holding it for longer makes sense or cash in on the hot sellerís market.

Lease is up for renewal end of May.
Title: Re: Decision to sell rental property
Post by: former player on April 13, 2021, 02:56:00 AM
You'll be fine whether you keep it or sell it, so it's pretty much a decision on the margins.  Keeping it needs more work/attention, selling means putting the proceeds in index-linked stocks you only need to think about at tax time.  Which suits your life better?
Title: Re: Decision to sell rental property
Post by: Car Jack on April 13, 2021, 08:54:17 AM
To me, it's a question of whether I want to do the work being a landlord or not.  Personally, having had a model tenant leave at the end of a lease and the tenant from hell move in, I'd sell.  The money made on the rental could probably be earned with a few nights driving Uber or working a weekend shift at Pizza Hut.
Title: Re: Decision to sell rental property
Post by: ChpBstrd on April 13, 2021, 10:33:05 AM
Run your complete set of numbers through the spreadsheet that was shared in this sticky thread: (

If the ROE is good enough to justify the work and risk, I'd suggest holding it. You have a model tenant, so you may be charging below-market rent. This makes sense, but if that tenant ever moves out, you'll want to run the numbers with the rent raised to market levels. Also take a look at the economics of refinancing if you have not done so already. (

Tinkering with these two numbers could drastically change your perspective.