Sell a negative cash flow rental property?
I own a townhome in NC I’m renting out for $1475/month. Since I purchased the property 4 years ago HOA fees and property tax have increased DRAMATICALLY. At first my mortgage and HOA together were around $1300/mo. Now I’m paying $1680/mo. Initially I was breaking even on the rental but now am losing ~$200/mo. I can easily take this hit every month with my income but would rather not. I have a great interest rate of, I think, 3.8%. Unfortunately with the current housing market the property has depreciated since I purchased it ~4 years ago. I owe $213,000 on it and realistically if I sold it now, especially given it’s about to be fall, I could probably get around $240,000 for it. With selling costs I might have around $20k in equity. I made a down payment of $22k when I bought it. So basically I would break even. I don’t enjoy being a landlord as I have a toddler and stressful job. I have had more than one terrible renter and had to evict, but have an excellent renter in there now. I have to make a decision soon to sell or continue renting long term. In order to avoid capital gains tax I would need to sell by mid-2027 as I moved out and started renting it in 2024. I’m thinking cut my losses and sell it now. I could rent it out for another year, but I risk bad renters, vacancies, maintenance costs, rising HOA and property taxes, or even further depreciation in value. Thoughts?