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Your looking at this all wrong. The metric you need to calculate is Cash on cash return, COC. What return are you getting on the cash you point down, not the loan amount.
If your referring to the idle equity, it’s a safety net, not a bank
$42k on $800k means a yield of 5.25%. It's a good enough constant cash flow. Stock market returns are not guaranteed and the yield on high dividend funds is pretty low right now. I would stay put for risk free rental income as compared to risky stock returns.
Risk free lol. One bad tenant and you're looking at $42k+ in repairs, back rent, and legal fees
Are you able to ride it out until the mortgage is paid off? Do you need the cash sooner? Are you including principle of each mortgage payment in your profit?
I looked into this a lot (I also have two rental properties) and there's reasonable arguments for and against choosing property over other investments. One of the best is hedging against inflation and stock market volatility, and that you're using leverage. But my personal favorite is that the real win is once your mortgage is paid off and you're at retirement age and the whole thing is just cash flowing.
If you put 25% down, you invested $140K. $42K annually is 30% ROI. Plus the equity you are building in the property. This is an amazing return.
Are you missing the ongoing mortgage payments?
Paid off?
A 42K annual profit on a $800K valuation is a 5.25% Cap Rate. That does beat the stock market which produces 7-10% returns while being hands-off.
You can get 5% in a CD these days so those returns are very low
I think it’s good to have a couple rentals to diversify - would keep as long as it’s not too much work and you can get responsible renters. My cap rate is much lower for a coastal property and I’m grateful to have the steady rental income, which I typically invest most of anyway.
No mortgage?
This is incredible return. Which area?
Mortage is not yet paid but will be in a couple of years. Rent covers it right now. The cash flow I am assuming is after the mortgage is done. I dont need the money right now and also see it as a asset that has appreciated AND gives a cash flow. I however may sell one at some point in my retirement as an extra means to fund the retirement too
Do you have a long term capex account? IE if the roof needed to be replaced or the AC went out, do you have funds set aside? Or would that just eat into your cash flow for a few months to cover?
Is the $800k in “trapped equity” including your $560k invested?
If so, what would your capital gains be? I’d be tempted to cash out and stick the $800k in the market if these are your only rentals.