If you own a rental property and are thinking of selling, don't do it unless you absolutely have to. To build great wealth, aim to own your rental property for as long as possible.
As fate would have it, my great tenants of two years and two months gave me their 30-day notice while I was returning from a vacation in Honolulu, Hawaii. Initially, I was dismayed because they always paid on time and took good care of the property. I thought they’d stay until their daughter graduated from high school in five years, but no such luck.
After getting over my disappointment, I got excited because this was my opportunity to sell one of many properties we own in San Francisco. We want to eventually lighten our responsibilities and raise capital to buy a new place in Honolulu in 2030.
Unsure whether to sell or continue renting out the property, I created a race, as I have in the past with other rental properties I considered selling. In one lane, I listed the property for rent and looked for suitable tenants. In another lane, I interviewed real estate agents to potentially list the house. I would ultimately go with whichever option succeeded first.
Why You Shouldn't Sell Your Rental Property
Here’s what I learned and why I’ve decided to keep renting out my rental property until I absolutely need to sell.
1) Stubbornly high commission rates
I was hopeful real estate agents would lower their commissions after the collusion verdict against the National Association of Realtors. Paying a 5% commission is high in this age of lowered costs due to technology.
Additionally, it's illogical for the seller to pay the buyer's agent's 2.5% commission, given the buyer's agent should aim to get the best price for their buyer. Instead, the potential buyer should pay the buyer's agent, and the seller should pay the seller's agent.
I remember selling a property in 2017, paying a 4.5% commission in total, and wondering why I was paying the buyer’s agent 2.5% to negotiate a $25,000 reduction in price. It made no sense.
Real estate agents insisted that sellers need to pay the buyer's agent a 2.5% commission to convince their clients to buy. When I questioned whether a buyer's agent wouldn't show a property for less than 2%, they indicated it would be harder.
Only one agent was willing to lower their commission to 4.75% because he had represented me as a dual agent previously. It seems there might be a secret pact among agents to maintain the 5% commission rate, ostracizing those who break it.
Despite the judge's verdict on real estate price fixing, change takes time. Therefore, it's best to hold onto your rental property until commission rates drop significantly. Thankfully, after August 17, 2024, I’m seeing more proof real estate commissions are coming down.
2) Selling creates economic waste
The ideal duration to hold a rental property or any risk asset is forever. By holding forever, you avoid commissions, transfer taxes, staging fees, capital gains taxes, and painting and other preparation costs.
Instead, if you need money, consider borrowing against your assets like billionaires do. This method avoids fees and taxes while maximizing returns.
You should only sell your rental property if the economic waste it produces is less than the benefits of selling. Benefits might include more time, less hassle, increased liquidity, peace of mind, reduced stress, and a better investment opportunity.
Thankfully, post August 17, 2024, I got proof real estate commissions are declining as Sotheby's, a huge real estate brokerage is agreeing to do 2% commission rates on both sides.
Further, as real estate commissions come down, I think performance-based commissions will be more common. Real estate agents confident in their abilities to provide value will be able to win more business. Sellers will be more amenable to performance-based commissions too because it completely aligns incentives.
With declining real estate commissions, there is less economic waste.
3) Avoid the ordeal of reinvesting the proceeds
Real estate transactions usually involve larger amounts than average stock or bond sales. Selling a rental property means having a significant amount of capital to reinvest, which can be stressful if you don't have a specific purchase in mind. You might end up losing money compared to holding the property.
In my post about the difficulty of having too much cash, I highlighted the effort I went through to reinvest $106,000 from a private real estate fund capital distribution. The stock market was at an all-time high, so I invested in various stocks in small amounts to avoid losing too much money in a sudden downturn.
If I sell my rental property, I will face even greater pressure to reinvest a larger amount wisely. The most compelling investments for me are in commercial real estate and private AI companies. With public AI companies and big tech doing well, it seems likely private AI companies will be revalued higher during their next round of fundraising. Therefore, I want to be investing in them now.
But my investment framework limits allocation to 10% per alternative asset class, leaving 80% to figure out. Perhaps 10% will get into the stock market at all-time highs, while 50% will get invested in Treasuries yield 5%. I'm not sure.
By holding onto your rental property, you avoid the stress of reinvesting the proceeds and can focus on cash flow generation, which is often more important than net worth growth. You also aren't tempted to blow the proceeds and things you don't need.
4) Hold onto a valuable asset for your children
Whenever I consider selling a rental property, I imagine what my children will think 20 years from now. Inflation makes real estate more valuable over time. By owning rental property long-term, you benefit from appreciating property values and rents.
During your ownership, you can teach your children about finding tenants and managing the property. By the time they are adults, you can hand over the keys for them to manage or rent the property at an affordable price.
Instead of giving money to your children, give them the gift of managing a rental property that requires effort. When there is more effort put in for creating wealth, there is more appreciation for the wealth that is received as a result.
If you don't want to give your children rental properties to manage and earn from, keep them for yourself to pay for retirement. Today, roughly 50% of my passive investment income comes from rental income.
5) Gives you something meaningful to do in retirement
In retirement, if you're not careful, you might feel empty due to a lack of purpose. Your kids might be out of the house, and you no longer have your work identity, which is a downside of retiring early.
However, owning a rental property portfolio gives you tasks to do every year. Whether it's finding new tenants or fixing a broken fence, owning rental property provides a sense of purpose.
Just the other day, I noticed an exterior pipe leading to the sewage was disconnected from the gutter drain and filled with mud. I had a plumber rooter the pipe and install a new one. Although it cost $730, I felt satisfied taking care of it so quickly. The plumber recommended rootering the pipe annually, which I hadn't done in five years of ownership. The previous owner likely hadn't done so either.
Don't underestimate the importance of having something meaningful to do in retirement. If your kids are still at home, I encourage you to teach them about managing rental properties. This way, they learn vital skills before they launch into adulthood. Many retirees “tinker around the house” for a reason.
You Could Make More Money Elsewhere If You Sell Your Rental
As you grow wealthier, segment your assets by risk level. Ideally, sell your rental property and reinvest the proceeds into similar assets through a 1031 exchange. If managing tenants is tiresome, consider reinvesting in public REITs or private real estate funds.
Yes, you could sell your rental property and invest in the next big stock, but this changes your net worth risk profile, which could be detrimental if new investments fail.
Holding onto your rental property brings peace with the asset class. You can manage it, let it generate income, and appreciate according to the market. If you want to invest in another asset class, save for it instead.
One of the best psychological tricks I've used to keep my rental property for longer is to start view my tenants as guardians, not consumers. As guardians of my rentals properties, they are the first line of defense in case something bad were to happen, like a massive leak.
The more money you have, the more you want your investments in the background so you can enjoy life. Of course, if your rental property is difficult to manage with high turnover and low yields, sell it. I've written a post highlighting indicators to consider before selling.
For the most part, I encourage you to hold onto your rental property for as long as possible. Think of it as a war of attrition—if you persist, you'll likely grow much wealthier as a result.
Reader Questions And Suggestion
Have you ever sold a rental property and regretted it? Why did you sell and what did you do with the proceeds? Do you believe the best time to own a rental property is forever?
To invest in real estate passively without the stress or hassle of dealing with tenants and maintenance issues, check out Fundrise. Managing over $3.3 billion, Fundrise focuses on the Sunbelt region where valuations are lower and yields are higher. As mortgage rates finally decline, the demand for real estate should increase.
As always, past performance is no guarantee of future results. Invest only what you can afford to lose and won't need. Fundrise is a sponsor of Financial Samurai, and Financial Samurai is an investor in Fundrise.
Hello Sam, I started investing in real estate in 1999 when I graduated from business school. I built a multi-million portfolio in short order, i.e., pouring my salary, bonuses etc. into property and keeping personal expenses low, and then, enjoyed great returns for several years. After the debacle of 2008, I started noticing that tenants thought rent was optional. Then, during Covid, courtesy of the CDC and enforcement from the DOJ, tenants stop paying rent.
Most of my properties were for low/middle class and two that are very high end – greater than $1M. Therefore, I took advantage of the high prices and liquidated my portfolio and only kept the properties that high net worth individuals could afford.
I reinvested the proceeds into our dream home, a horse ranch in the mountains. I’m scheduled to hit an eight figure net worth in two to three years with a healthy six figure passive cash flow and then convert one of the properties into a second home.
I think of all the people who abused the CDC mandate and if that not occurred, I would still be providing comfortable, single family residences in safe neighborhoods for people that needed to rent. However, for my family, I have six kiddos under the age of 13, and this was a wonderful outcome in the long term.
And, I do not plan ever selling the two properties as they will serve as part of the foundation for general wealth.
Hey, great post! I totally agree with holding onto rental properties if you can. Selling can feel like a quick fix, but the long-term benefits of keeping a rental are huge. Your idea of creating a race between renting and selling is smart, and it’s cool to see how you adapt to changes in the market and your life. Thanks for sharing your experiences and insights!
Haven’t read your site in years man but decided to see what you are up to these days. Funny so many of your articles resonate with life choices/decisions and issues that I have also contemplated or done. I quit the corporate world 4 years ago after I hit 100k+ in passive income from my rentals and moved to the midwest for that easy life! For the past 4 years, I have been a part-time realtor and stay at home dad and it was exactly what I always wanted and felt very accomplished for myself. (I am currently 45 years old). About a year ago I started getting bored with doing realtor stuff and now that both my kids are about to enter public schools, I have decided to go back to work.
Honestly I am excited about being able to use my brain back to full capacity. It’s a 100% remote job with good pay and the timing couldn’t be better as well as my wife and I have decided we are ready to purchase our dream house and upgrade our lifestyle a bit. Within the next year we will be buying a waterfront Lake house and will make that our new primary. To do this, I plan on selling 4 of my rental properties so we can buy the Lake House in cash. It will still leave me with 4 paid off rentals so I am not upset about selling these rentals for this major life change we are about to embark on. On paper, it is not the best decision but I realized years ago, the quality of my life is more important then maximizing returns and making decisions solely based on what the numbers show are the best decision.
Anyhow, just wanted to say I feel you brother on a lot of your previous issue and appreciate seeing you are still writing about it.
Always enjoy your posts, Sam, but this one hits home today. I recently listed a side-by-side duplex that we have owned since 2012 and it sold sight unseen in 1 day for list + 5% and only a financing contingency. Closing is in 3 days.
Why would I sell? I’m 84 years young and even with a property manager ( who makes more that I do from the property), I’m still tired of dealing with the 3 T’s – Tenants, Trash and Toilets. The Cap Rate is still good for the original purchase price, but NOT good for it’s current value. My original plan was to do a 1031 exchange into a Delaware Statutory Trust, or REIT, to avoid a HUGE capital gains tax bill and retain the basis step-up for our daughters. But, we changed our mind and instead gifted the property to our Charitable Remainder Unitrust and this Trust is actually selling the property.
Why the shift in disposition strategy? Our daughters are both doing VERY well and are happily married to guys who are doing even better, so there is no NEED for a legacy – and they approved our decision. The CRUT deferes/maybe avoids the capital gains tax, plus we get a HUGE tax deduction now as the remainder value of the CRUT will go to charities we value when the last of us dies. And, the CRUT supplies a very nice income stream for the rest of our life.
As the CRUT Trustee, the challenge now becomes to invest the proceeds of the sale into appropriate investments to provide that income stream, and have residual value for our selected charities.
“ Our daughters are both doing VERY well and are happily married to guys who are doing even better, so there is no NEED for a legacy – and they approved our decision.”
Love this! What more can a father want? I’m with my kiddos now after a long swim outing and I just want them to find love and happiness, and earn enough doing what they want.
Wonderful you are donating the property Wayne. Well done! I hope to be as blessed as you as I get olderx
Sam
Makes me pleased – and proud – that a financial guru like you approves!!!
Struggling with this choice right now. We’ve owned a condo for many years and paid it off. Lucrative rental area near a univerisy. Low cap rate of 2% but never any issue finding tenants. The problem is that it needs at least 100k to update it and the reno won’t amount to much extra rent + the condo fees and property taxes are approaching 50% of the rent. On the other side, selling will cost 20% due to realtor fees and our capital gain. Not crying about any of this, we are lucky, just can’t decide what to do. Two young kids so right now the desire to simplify is strong. Stocks don’t need this much thought (usually)
Sam – I appreciate your point of view. I presently own 10 SFR rentals, paid off in FL. No HOAs. I’m planning to sell 1 of them now to free up some capital, it’s a property with the highest basis and the least amount of depreciation recapture as well. Don’t let Realtor commissions influence your decision. I’ve been a broker in 2 states for over 20 years. Everything is negotiable, and I am huge proponent of flat fee MLS type of services. The sands are shifting in the FL real estate market with insurance becoming harder to get, and much more expensive. Also, local governments have been doing a cash grab with property taxes during the recent uptick in values. Sadly, all this gets pushed downhill to the renter. Also, after some years, big expensive items need replacing (HVAC, Roofs, Plumbing, Exterior Siding, etc) so keeping the properties ultra-long term comes with some expenses, and it can take years for the rent to cover them. Real estate is an amazing investment vehicle if you’re up for the bumps along the way. Thanks again for your insights.
I agree with everything said here but one thing I’d like to point out as well as experienced among my peers, is that at the end of the day real estate properties are illiquid. Regardless of what kind of market you’re in, it’s very rare for you to turn a property into liquid cash in a short time in the case where you’d need cash right away. I plan on to hold on to my rental as I have enough on the side for any god forbid emergencies but I think there should be caution of when you might have too much properties that you would want to wind down as you go… just my two cents
How many rental property do you think is too many? Do you have thoughts about having your children manage them for the future if you have children?
At the end of the day, if people have housing security, life gets much easier.
I have held on to rental properties, and as a result, my asset allocation is quite skewed toward real estate and, less so, cash, as I keep a 6-month reserve of expenses for all rental properties plus personal residence. I have considered selling them as I’ve had many challenges. Casualties always come under the deductible (broken pipe, part of the roof collapsed in a heavy snow year). I also had one tenant stop paying during Covid and another who is noisy, parks where they shouldn’t, and generally annoys the neighbors. Ultimately, the tax cost of selling at this point would be huge after having owned and depreciated them for so many years, so I plan to continue to hold them and use the income to bridge early retirement.
I’m curious: Do you keep a higher amount of cash reserves because you’re a landlord, and if so, where do you keep it? I have mine in a Vanguard money market account. I also have an untapped line of credit, so maybe I am being too conservative and should just put the reserves in a total market fund. I feel like I’m missing out due to a significant cash drag, plus having so much equity tied up in real estate instead of in the market.
That’s the conundrum, after making a huge profit, and having to do depreciation recapture. It’s hard to sell and trade so much economic waste.
But it does sound like you’ve had some difficult times in the past. So one solution is to just lighten the load a little bit by selling one or two of the most problematic properties.
I actually don’t think about my rental properties when deciding on how much cash to have. But I probably should!
So far, I’ve been able to pay for everything as they come, and I am very meticulous about maintenance upkeep.
Currently, I flush 99% of my cash into Fidelity, which has a money market fund that pays around 5%.
Hello Sam, great post! I just sent this to my wife because on our walk yesterday we were discussing how valuable our rentals are and we just paid off our first rental yesterday!! We see it as a key part of our future and even more so should we decide to have children as the value a rental property can bring to young ones learning I think is significant. Thanks for the post!!
Good stuff. Your future adult kids will be happy you have them. I wish my parents owned plenty of income generating assets since the 1960s and 70s!
The post I needed ! Thanks
Random questions- are your rental properties under an LLC? If so should each rental have its own LLC? What if someone has only 1 rental, should they hassle with a LLC? If you have any posts addressing this will you please point me in right direction.
Hello Sam,
Have you considered using a flat fee listing service like FSBO.com or similar to sell your property? I have been using flat fee mls listing services in the Chicagoland area for the past 2 decades selling properties, only paying the commission I set for the buyer’s broker, after the flat $400-$500 mls listing fee. Just recently, I listed my primary home for sale using such a service, and tested a 2% buyer’s commission due to the extreme lack of comparable inventory in my area. My home went under contract in 3 days at near asking price, and I will end up paying a total 2% to the buyer’s realtor, plus the $400 listing fee. You will have to do your own showings of course, unless you provide access remotely.
I sell about 50 parcels of vacant land per year. My observation with realtors is driven by brokers. They set minimum targets for their agents. The agents are accustomed to 3% and are anchored to that target regardless of competition. Many will turn down the listing and go look for the next lead instead of reducing their rate.
I am currently renovating to sell a small condo in DC. There is no appreciation in condos, and the lower rents that I’m receiving almost do not cover the expenses. I will not have to pay taxes, bc the property has not gone up in value. It actually might save me taxes, bc I am taking a hit. I am going to use the money to either pay off high interest rate loan (14.5%) and/or purchase a fixer upper in Mexico City where I would hope to flip and earn $50,000USD. So, having a clear use for the money you are taking out can be a clear sign that you are going to come out ahead by selling your property. I still have 9 more properties in DC. So, this is a way of diversifying, too.
Oh wow… what institution lent you money at 14.5%? I’ve never heard of not paying property taxes b/c the value of a property hasn’t gone up.
Hi Sam. Thanks for the questions for further clarification.
I got a personal loan of $80,000 for 14.5% over 6 years which I used to purchase in “cash” a condo in Mexico City. (Impossible or even MORE expensive for me to get a mortgage here).
When I sell the property here in DC, I mean that I won’t have to pay “capital gains taxes” on the increase of property value when I sell, bc I am just taking out my equity, the property has NOT gone up in value. Yes, I pay property taxes every year, automatically paid by my mortgage company. My interest rate on this condo in DC is around 4% (It’s an investment condo, so no Fannie Mae subsidized rates).
What if the HOA dues shot up so high that I can’t possibly rent the property at a rate that will break even?
Tough call. You must predict the future of where your property’s price might go. I have a condo in SF with a growing HOA as well which I’m thinking of selling. But b/c it is a condo, it’s so low maintenance and the HOA takes care of the roof, painting, common areas, etc. It’s actually nice and I appreciate the HOA more as I get older.
But yeah, if you can’t get positive cash flow and you don’t expect prices to increase, then sell.
You can avoid the forever escalating HOA dues by never buy a condo. You really only want to own dirt. A condo (structure) is a depreciating asset. The land you get with a condo is incredibly tiny and you have zero control over it.
Sam – I have owned multiple SFH in Texas and Colorado. I sold the TX property back in 2013 and sold one of my CO SFH in Oct 2021 to Opendoor. It was our primary home until beginning of 2020 (it was rented later until I sold it) and I considered various options but the fact that: 1) I did not have to pay cap gains on it upto $500K for married couples 2) Too much equity tied up and refi was too costly … I decided to sell it. I still paid 6% to opendoor but they were offering 30K more than any realtor was willing to list it so I just decided to sell it to OD.
I regret selling it for 2 main reasons – 1) my kids were born in that house so it had sentimental value and my kids still miss it. 2) I could have squeezed more money out of OD if I was a bit patient.
I think I made the right choice since I rolled all the money I received directly into Index funds in my brokerage and that has grown very nicely in last 2.5 yrs. I still have 2 other rental properties that will serve as inheritance for my 2 young kids if they need it. I probably won’t sell it since I’m not a fan of crowdfunded RE or REITs and I like some RE exposure in our portfolio that we directly control.
Thanks for sharing. Selling in 2013 is tough. I almost did in 2012, but thankfully, couldn’t find a buyer at a reasonable price so I said screw it. But at least you reinvested the proceeds and made money.
The nostalgia stuff, I’ve found, tends to fade within 6-9 months once you own another property and raise your kids in it. But I hear you.
What did you end up investing the 2013 proceeds in? If I sold a rental today I would not have the courage to put it all in the S&P 500 now.
I put the proceeds in a 6 month CD at Ally Bank at the time…got a decent interest rate for a short period. I eventually ended up using it to buy our house in 2014 (the same one I sold in 2021)
Not bad then! Surely that was a good return.
Sounds like you went through the thought process very thoroughly. There’s certainly a lot to consider if you don’t need to sell but have the option to. Screening tenants and agents takes a lot of time. There are so many things to consider from everything from personality, experience, risk, and cost. Best of luck with your prospective tenants!
Thanks. Screening tenants thoroughly is so important, I can emphasize the process enough.
Sam, read the book “Die With Zero”. It explains how you need to sell your assets and enjoy the fruits of your labor before you die, or it will be wasted effort on your part.
My wife and i have no heirs, and don’t want to pass leaving all that $$ to a charity when we could have enjoyed it in our golden years. Plus, some rentals are downright headaches that are incurable, particularly those low-rent places where the tenants just dont care about them. My later life has been spent fixing them up every 12months to re rent to the same class of bad tenants. We currently have 17 rentals ( good and bad) and are planning on selling one a year and thoroughly enjoying the profits while eliminating the headaches some can bring. We are 70, and have about 15 years left.
We plan on going out broke, and enjoying it all the way
Steve from Tidewater va
I’ve read the book. The thing is, the other likely has a net worth of over $100 million, so dying broke is a luxury belief.
With no children, I will definitely try to go broke. And with 17 rentals, I would definitely try to sell the chronic bad ones at least.
I wish you the best of health with your remaining years.
Wow, at 70 you’re still in the rental business. Good for you! I’m 58 and have been training my daughter to take over my real estate rentals, once she is fully ready to take over, I will step aside. Life is too short to be in this rental business game.
Is she down to manage them?
She grew up learning with me this business, she enjoyed being an attorney, however, the hours are not fun. Therefore she has the options of working less hours as an attorney and taken over the Real Estate. We only have 20 doors is manageable and I will help if need it be.
Sam – The graph regarding the depressed real estate recovery – is that pertinent to *residential* real estate or *commercial* real estate? In there a difference or a lagging indicator between the two? I ask as the graphic in the newsletter indicated it pertained to commercial real estate…
It pertains to commercial real estate. I’ll clarify in the captions. Thanks.
If given the choice between: investing 1mil in treasuries or a rental, I’d always do the real estate.
Multiple reasons: the asset inflates with inflation (usually), it can be shielded from liability, it can be passed to your beneficiaries tax free due to the step up provision (for now), cash flow (that increases), can be purchased with leverage, and best of all income can be depreciated.
Yes, all good points. I do love me some 5% risk free treasury bond yields. Review rental property as a bond plus type of investment with greater upside.
As soon as we extend our timeframe to include our children and their timeframe, holding onto our investments gets easier.
I own a duplex that I live in so I appreicate the assistance that rental income provides. Although my tenant just told me they can’t make July rent due to job loss. So not sure if I’ll have to go down the eviction route at some point if they can’t make rent. My last tenant was there for 10 years although I did have way below market rent, but always paid on time. When everything is going well and you don’t have a surprise repair bill ($3k a month ago), then its great, but when you have a problem tenant its not. Which brings me to my next point.
My parents home is in a trust with me and my sister. I don’t want to think about it, but when my parents pass the home will be both me and my sisters. The home is probably worth $900k and is a two family home. If I buy my sister’s portion out, I’ll have a rent producing house for half the cost. I just have to come up with the $450k, but beyond that I have the issues I stated earlier with my current duplex. Should we just sell the place or based on your article would you be more inclined to keep it as rental? I’m 50 now and I’m not sure I want to deal with two more sets of tenants. Hopefully I won’t have to think about this far into the future. Thanks
Depends on the quality of tenants you think you’ll get and the rental yield.
I hear you are not wanting to manage rental properties the older you get. Many adult children who inherit property is tend to sell their properties off for the quick liquidity.
I would probably sell the property if you receive it after age 60 and keep things simpler.
Do you have any children to consider?
Sorry for the double post, I didn’t think my first one went through. I have two kids under the age of 3, so I’m an older Dad. So I do think about the house as something I could pass down to them as an income generating asset or if they would need a place to move into when older. If I just pocked the $450, minus the commission for selling, I’d probably just throw it into the market, so IDK if i’d have it ear marked for anything.
Right now I could get about $3k per month for the each apartment. So I would definetly be cash flow positive out of the gate even with a mortgage and expenses….. since I’d be getting the house at half off. I hope my parents live to a very old age, but they are around 80. The financial side of my brain thinks its a good business decision to keep the house and keep it in the family and my landlord hat has me thinking about dealing with repairs/tenants.
I have been a landlord in Arizona now for 30 years. All of my rentals are single-family homes. I have found it to be pretty easy and not very time-consuming. They are all paid off and generate significant passive income. I am now 70 years old. So my plan is to keep them for my kids. At some point, I will turn them over to a management company. That is an easy way to keep them, but not have to deal with all of the landlord problems.
Hey Jim, Have you considered a management company to manage your rentals and pay a percentage of rent to have them handle all of the tenants and maintenance for you? If your cash flows are positive, that could be worth considering.
I own a duplex that I live in so I appreicate the assistance that rental income provides. Although my tenant just told me they can’t make July rent due to job loss. So not sure if I’ll have to go down the eviction route at some point if they can’t make rent. My last tenant was there for 10 years although I did have way below market rent, but always paid on time. When everything is going well and you don’t have a surprise repair bill ($3k a month ago), then its great, but when you have a problem tenant its not. Which brings me to my next point.
My parents home is in a trust with me and my sister. I don’t want to think about it, but when my parents pass the home will be both me and my sisters. The home is probably worth $900k and is a two family home. If I buy my sister’s portion out, I’ll have a rent producing house for half the cost. I just have to come up with the $450k, but beyond that I have the issues I stated earlier with my current duplex. Should we just sell the place or based on your article would you be more inclined to keep it as rental? I’m 50 now and I’m not sure I want to deal with two more sets of tenants. Hopefully I won’t have to think about this far into the future. Thanks