Real Estate Investor Says Their Rental Property Has Nearly Doubled In Value. ‘Am I Crazy To Want To Sell A 2.75% Rate Rental?’
From Yahoo Finance: 2025-04-13 11:16:00
A real estate investor is considering selling a rental property in Boulder, Colorado, that has almost doubled in value since purchase for $450,000 in 2015 and is now worth $850,000. Despite a 2.75% mortgage, rising property taxes, maintenance costs, and tenant turnover are affecting returns.
While the property cash flows $500/month and pays down $8,000/year in principal, expenses like mold remediation and ongoing maintenance are eating into profits. The owners, who live across the country, find it challenging to manage the property from afar, with a property manager taking 10% of monthly rent.
Redditors advise the investor to consider selling the property with $500,000 in equity for potentially better returns investing in the stock market. Some suggest a 1031 exchange into a more profitable property or locally. However, others argue the 2.75% mortgage is too valuable to give up for long-term generational wealth or retirement income.
Emotional attachment should not cloud financial decisions, as selling now might provide a better return and peace of mind despite the potential for long-term benefits. Alternatives like switching property managers, refinancing, or seller financing are suggested to create a more passive income stream without selling outright.