Exit & Reinvestment: Sell, Refinance, or Hold
Answer 5 questions to get a 5-category exit checklist: comparing the three exits, refinance timing, sell vs hold, reinvestment options, and a decision framework — the exit is the starting line of the next investment.
Every rental eventually asks the same question: sell, refinance, or hold? It's never a one-time choice — the same property gives different answers at different life stages, market phases, and equity levels. Selling means capital gains and depreciation recapture; a 1031 exchange defers but doesn't forgive; refinancing turns equity into cash without giving up ownership; holding keeps the cash flow and appreciation but locks your capital. This checklist moves from comparing the three exits to a decision framework you can actually run. Rates, periods, and rules are flagged for confirmation — run the final decision past your CPA and agent.
- Three inputs to any exit decision: equity, cash flow, and opportunity cost — never skip one
- Watch the refinance/1031 timeline clash: refinancing in anticipation of an exchange invites IRS challenge
- 'Holding by default because selling is work' is often the most expensive option