Submitted by IamaPlantMan t3_zv8ch8 in personalfinance
As the title suggests, my wife owns an apartment building in a nice part of downtown Seattle. It's small (4-5 units) and in total is worth around $2-3M. Her parents bought it 30 years ago when my wife was born and have been renting it out, putting the money in a trust until she turned 30, which was this year. It all sounds nice in theory, but there isn't much actually money in the trust as it's all going toward the management company, maintenance, and previously paying for both my wife's college and medical school (we are both physicians). It is also not accruing that much profit per year (maybe netting 5-10K per year) after all the expenses on it are paid.
We live on the East Coast and have never even seen the building. Now that it's in our hands, we aren't sure what to do with it in the long term, and we are looking for opinions. We are both relatively high earners and we have two young kids, so we can certainly keep the building and pass it down the family in perpetuity. Since it doesn't really accumulate a huge amount of cash in profit, it's basically just a building in our name.
So the question is, what would you all do? It's not much work to keep the building other than to pay Washington state taxes and a CPA every year. On the other hand, selling it would in the short term allow us to spend money on traveling, buy a nicer house where we live, invest in other assets, etc... (although again we aren't strapped for cash). Appreciate any honest opinions.
Edit: Big thank you to everyone who took the time to offer their advice. This post got too large for me to respond to everyone (which for me is a good thing). I will say this though- It turns out I know nothing about owning real estate, and there is a ton of digging we have to do in order to assess the finances of this property over the past couple of years. Everyone is right. The amount we are getting in return seems very low given the property’s location and current rent prices. We don’t know who is currently living there and if they are long term tenants. The last thing I want to do is make someone’s life miserable who may depend on that property. My wife and I don’t need cash, we are both well-paid as is. If we won’t be displacing people who depend on this place we will likely end up selling it and investing more in things closer to us.