Real estate advice: Buy, hold, sell, etc?
I’m looking for opinions and options.
I’m 10 years in on a 30 at 5.7% fixed. I have the property rented for just enough to cover the mortgage/insurance/taxes/PMI, water/sewer & HOA fee. The tenant pays electric/gas. So, in other words, neutral cash flow.
Based on a 4% rate, I could potentially refinance into another 30 year and get $175 in cash flow. Or I could pay $35 extra a month at 3.5% and do a 15 year. That would be a difficult move, though since I could use the cash.
I could also raise the rent, but I’m reluctant to do that for anything more than $20/month. I’m a bit soft, I know. Also, the back is not landscaped still, so it seems difficult to justify raising the rent too much.
Or, I could sell. I’d clear maybe $40,000 before all the middlemen took their piece.
Today, I thought of selling to my tenants and carrying the financing myself. That would give me a few hundred dollars every month, I imagine.
Anyway, feel free to tear up my assumptions above and give me your straight opinion. My goal is to get cash flowing in the right direction. If I sold it, I could pay off student loans and probably pocket $10–20k.
One other consideration is that I’d likely not qualify for another mortgage anytime soon. But, there’s a part of me that almost would rather own a “micro” house free and clear at this point than deal with all of that. Maybe not forever, but for now the thought is appealing.
Thoughts? What do you recommend based on your experience?
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