I'm looking at purchasing rentals in a college town in the Midwest with good rental numbers and good potential upside (5-10 years). This would be a long-distance rental for me, but it's within 3 hours of my parents in the suburbs of Chicago. We visit them twice a year, so I would be in the general area every 6 months.
For the new college town, I would be looking at purchasing 4 bed/2 bath single family homes (1600-2200 sq. ft.) for about 90K. They would require 10K to 20K of cosmetic upgrades and rent out for $1200/month. The long term plan would be to grow to 5-10 properties in 10 years.
To make this happen, I'm considering selling one of my rentals in Florida. Part of the reasoning for selling my Florida rental is that I think it's done appreciating. I'm starting to see a correction and small decline in rents and selling price, mostly due to an over supply of "new builds".
I purchased the Florida rental for 95K in 2012, put in 16K worth of repairs. The price of the house was probably 250K in 2018, but now 240K in 2019. The rent in 2015 was $1600 and had steady increases to $1850 in 2018. For 2019, they are $1750.
My current total PITI is $625/month, but for next year it's going to be closer to $675/month due to increase in taxes. My current mortgage rate is 4%. If I did a cash-out re-fi as a rental, I think I could get 4.75-5%. Would it be possible to put the Florida rental in my wife's name only? She is a substitute teacher with an income of 8K/year. If I did a cash-out refi, I think I could pull out 100K and my new PITI would be around $1200/month. If I sold, I think I would clear 140K (after taxes).
Do I...
1) Do nothing and keep Florida rental with slowly declining numbers.
2) Sell Florida rental and buy 2 properties in Midwest college town
3) Re-fi Florida rental and buy 1 property in Midwest college town
