My wife and I have 4 rental houses left out of 17 units (a 9-unit and 4 other singles) that we've been divesting out of over the last 5 years or so.
We're debating whether to sell these remaining four as well, which are basically the most stable and trouble-free of the bunch. They are not super profitable in an absolute sense. In total they are worth maybe $400k or so, and yield $2k/mo = ~6% cap rate, which does include management fees as well as a set-aside for anticipated, long-term expenses . There are no mortgages.
These do not represent a meaningful portion of our income today, though we would like to retire early in the next few years, at which point having an extra $2k/mo coming in would certainly be nice. And somehow rental income just feels different, more stable, or more real than stock income.
One of these rentals is coming up for lease renewal in November and my very-proactive management company is asking me to renew at the current rent of $1025, which is below the market rate of more like $1150-1200. Of course we could just ask to jack up the rent - but an extra hundred bucks a month just doesn't matter much to us right now. If we decide not to sell, I'll probably ask for a rent increase so we don't get too far behind the market.
We're considering selling them all soon, with this one coming up in November being the next to go. If we did sell them, we'd just put the money in with the rest of our pile, which mostly goes into Vanguard Total World and US Bonds. The $400k total value represents maybe 20% or so of our total portfolio outside the house we live in - and most of that portfolio is in retirement accounts.
We also occasionally get irritating stuff that we have to deal with, like a notice about the weeds being too high, for which the penalty is a $1000/day fine and/or 30 days in jail (really?!), or some 'business privilege tax' that we didn't know about, but which is now late.
Reasons to keep:
- Stable income in retirement
Inflation hedge / appreciation
No real issues with any of these properties
The current yield of 6% is higher than what we can expect from stocks and bonds
- Risk - Lawsuits, etc.
Risk - Bad, delinquent tenants, major repairs
Game mostly won, no need to keep playing
Hassle reduction