Keep or sell rental and invest proceeds?
Trying to decide what to do. I own a rental property worth about $1m. I owe about $225k on it at 3.125% interest. I net about $3k/mo in rent after all expenses. I don’t expect it will appreciate much more in value - it’s already had its pop. I expect it will net about $5-6k/mo once mortgage is totally paid off.
I expect we’ll have some major capital improvements facing us soon, especially a new roof.
I’m trying to decide whether to keep or sell and invest the proceeds in the S+P 500. I’ve always looked at this as my kids’ college fund and as a result, haven’t invested much in 529s for them. Kids are aged 7.5, 6, and 4yo so have a little time for compounding if we sell and invest that money. But it’s also a duplex located right outside of Boston so it’d also be nice to let them live in, should they so choose, someday when going to college or just after college.
On one hand it seems like this is a good hedge and good diversification. On the other hand, I worry I’m leaving money on the table by not just investing that equity into the market where it would be both liquid and potentially generate higher returns.
What would you all do in this situation? Thank you!!