House is finished and I can't decide whether to sell or keep it

I want income without a second job so I read your post from the other direction. If you keep it and self manage, you are the second job. If you hire out at 8 to 12 percent of rent, that's 150 to 230 a month and your 125 goes negative.

I'd honestly rather have 40,000 in hand than a house that costs me 75 a month and a phone that rings. But I'm not the one who found the deal.

Different angle. 205,000 all-in for 1,900 rent is a ratio I'd never get where I look, and I look at small towns where a house is 95,000 and rents for 950. Same ratio, much smaller checks, much thinner tenant pool. The 1994 build is worth something too. wren's turnover point hurts less on a house that isn't going to hand you a sewer bill.

The part I'd want to know is whether that neighborhood you like actually rents well or just sells well. Those aren't the same thing.

Two separate decisions are tangled together here and they get clearer apart.

First decision: do you want to own this house at 265,000, given that's what someone will pay you for it. Holding it means choosing to buy it at today's value. Your basis of 205,000 is history. On 265,000 of value, rent of 1,900 a month is 22,800 gross. Take out taxes, insurance, vacancy, maintenance, and management if you use it, and you'd likely land in the 13,000 to 15,000 range of NOI, call it 5 to 5.6 percent on value. That's roughly where the market is pricing decent suburban houses right now, and ATTOM's 2026 data showed yields falling in about 55 percent of counties for exactly this reason. Record prices, rents that grew 1.3 percent year over year.

Second decision: the refinance. Pulling 198,000 out doesn't change what the house earns, it changes who owns the earnings. At 1,375 of debt service against 13,000 to 15,000 of NOI, your coverage is around 0.8 to 0.9. Most rental lenders want 1.15 or better, so verify that a lender will actually write that loan at that amount and get the rate, the term, and any prepayment penalty in writing before you plan around it.

What the answer depends on: whether you have another deal ready for the 40,000. Capital sitting idle earns nothing and a thin rental at least pays down principal. Capital going into a project at your historic margins is a different comparison entirely.

I hold everything and I still think you should sell this one.

The hold case only works if you're patient by temperament, and you've sold three in a row because selling is what you do. A house you keep reluctantly gets managed reluctantly. Keep the one where the land or the location makes you willing to be bored for fifteen years. This one you like because you just finished it, which is a feeling and not a reason.