Yes it definitely does.
Couple of random thoughts:
1- definitely sell the NJ place. Some costs you are not considering in your Sell/Rent comparison are
- upkeep
- your time (managing a rental takes time)
- opportunity cost of not having a much smaller mortgage on the two houses.
I never buy too much into the "tax breaks". An unnecessary expense that gives you tax breaks is just s slightly smaller unnecessary expense.
No unnecessary expense is always better.
2- you seem to be changing your mind often/not being 100% sure what's best to do.
In these cases, I think the best thing you can do is... nothing. Take time to figure stuff out.
3- your business is now generating an incredible amount of money, but wasn't generating anything only two years ago: are you 100% sure this massive surplus is sustainable? If the answer is yes, I don't see why you should be in a hurry. In three years you can put away an insane amount of money and then sell the business and generate even more.
Such amazing situations have a huge opportunity cost of being given up.
My Plan for Semi-Retirement
Re: My Plan for Semi-Retirement
I have had both great and bad experiences with being an out of state landlord. Have had multiple rentals in multiple states. Some were former residences I turned into rentals (those were/are the GREAT rentals). Never hired property management, have always self-managed.
My great experiences are in a highly desirable city (a city that I previously lived and had connections in the real estate business) with a very tight rental market. As soon as I put the property on craigslist I get like 70 emails the first day and can cherry pick the very best tenants, keep their rent below market, they stay forever and pay rent like clockwork with zero hassles. I have a locally handyman (that was also my realtor and good friend) that I trust that I call when something breaks and he goes out to fix it. And he can do the turnaround on my properties if go vacant.
My bad experience is in a less desirable city without as strong of a job market and not as tight of a rental market. This property was a nightmare even though a nice property in a solid area of this city. I would put on craigslist for weeks with no decent inquiries. So I had to accept less than perfect tenants. No tenant stayed more than 18 mos. Turnover costs ate me alive. I had to start eviction proceedings on the last tenant before I dumped the house. She left so much trash in the house it cost $700 just to hire someone to clear all the stuff out, and that was just the beginning. I did not have great personal connections in the area so it was tough finding good help. Also did not buy this one right and did not have great financing on it. Only made this mistake once though!
So in summary, if you bought right, have good financing in place, solid positive cash flow, property is in a high demand area with a tight rental market and low vacancies, and you have good highly local trusted connections for affordable repairs and to help with turnover and re-leasing....it can work out good.
Also don't forget for factor in repairs, CAPEX, vacancy, credit loss, etc... into your positive cash flow calculations. Many first time landlords just look at the PITI and don't look at these other costs when running the numbers. It can easily cost $4,000 to clean, fix things, paint, carpet, few weeks of vacancy....when a tenant moves out and you need to turn the property if you are remote and can't do the work yourself.
I usually do not want to buy or rent a property unless it gives me AT LEAST $300/mo clear AFTER a conservative rent, PITI, capex, repairs, vacancy are all added up.
My great experiences are in a highly desirable city (a city that I previously lived and had connections in the real estate business) with a very tight rental market. As soon as I put the property on craigslist I get like 70 emails the first day and can cherry pick the very best tenants, keep their rent below market, they stay forever and pay rent like clockwork with zero hassles. I have a locally handyman (that was also my realtor and good friend) that I trust that I call when something breaks and he goes out to fix it. And he can do the turnaround on my properties if go vacant.
My bad experience is in a less desirable city without as strong of a job market and not as tight of a rental market. This property was a nightmare even though a nice property in a solid area of this city. I would put on craigslist for weeks with no decent inquiries. So I had to accept less than perfect tenants. No tenant stayed more than 18 mos. Turnover costs ate me alive. I had to start eviction proceedings on the last tenant before I dumped the house. She left so much trash in the house it cost $700 just to hire someone to clear all the stuff out, and that was just the beginning. I did not have great personal connections in the area so it was tough finding good help. Also did not buy this one right and did not have great financing on it. Only made this mistake once though!
So in summary, if you bought right, have good financing in place, solid positive cash flow, property is in a high demand area with a tight rental market and low vacancies, and you have good highly local trusted connections for affordable repairs and to help with turnover and re-leasing....it can work out good.
Also don't forget for factor in repairs, CAPEX, vacancy, credit loss, etc... into your positive cash flow calculations. Many first time landlords just look at the PITI and don't look at these other costs when running the numbers. It can easily cost $4,000 to clean, fix things, paint, carpet, few weeks of vacancy....when a tenant moves out and you need to turn the property if you are remote and can't do the work yourself.
I usually do not want to buy or rent a property unless it gives me AT LEAST $300/mo clear AFTER a conservative rent, PITI, capex, repairs, vacancy are all added up.