A rental property can have been a great investment and still deserve a fresh look. I think that becomes particularly important when you start caring more about the income it produces and how much of your time it takes.
Suppose you have $300,000 of equity in a rental that leaves you with $6,000 a year after expenses, mortgage payments and a reserve for major replacements. That’s a 2% current cash yield on your equity, before personal income taxes. It tells you something useful, but it leaves out appreciation, principal paydown and the tax effects that also matter to the decision.
Maybe you have financing you couldn’t replace today. Maybe the property is easy to own and you have good reasons to expect rents to rise. Those are legitimate reasons to keep it, and I wouldn’t dismiss them because one calculation looks low.
I also wouldn’t let “it’s been a great investment” answer every question about what I should do next. I’d want to compare keeping it with the actual alternatives, using what would remain after selling costs and taxes, and looking closely at the risks I’d be taking instead.
I put a simple hypothetical example in the slides. The part I’d spend the most time on is explaining why I would still choose to own the property today. If that explanation has changed over the years, I think it’s worth noticing.
