Hi everyone,
First off, I want to thank the MMM community for all of the informative and enlightening discussions I've been reading since the forums opened. Great stuff, and a very supportive group.
Now onto my situation and question. I own a second home in NYC (a studio apartment) that I purchased in 2001 for $180,000, and lived in until 2011 when I refinanced with cash out (the apartment was then appraised at $385,000) to purchase a single family home outright in one of the surrounding boroughs, which I live in with my wife and one-year-old.
After refinancing earlier this year to 3.25% on a balance of $287,000, my monthly cost is roughly $2,500 ($1,250 mortgage + $1,100 for co-op maintenance charges + $150 in utilities and insurance). I would love to rent it out, but it's a co-op and the board is against rentals in the building (/shakes fist in frustration). I'm wondering whether I should keep it or not. This apartment is my only debt, period. I take home roughly $7,600/mo. after maxing out my 401k, paying for health insurance, etc., and my non-real estate assets (i.e. savings, investments, retirement) total roughly $700,000.
Even though I can technically afford to keep it without renting it out, my gut tells me to sell the place (my last appraisal was for $560,000 back in February, though I think that's a bit high). But with the low interest rate coupled with the mortgage tax deduction (45% of the co-op maintenance charges are also tax deductible), the fact that it's Manhattan real estate with prices rising once again, that real estate can be a good hedge against inflation, that my family loves to use the place, and that my wife and I have often thought of it becoming our "old-age" home once our little guy has grown up and out (we're both in our late 30's), I have been hesitant to make any moves.
What would you do? Thanks in advance.