Head Spinning! Should I sell or rent my former primary home?

[Shelley Rubino]

I have been reading tons of these blog posts and I feel like I'm more confused and I'm thinking it might be because the market has changed so drastically in the last two years.  What I'm trying to figure out is as follows:

I paid $550k for my primary 5 years ago.  It's worth $950k now (per recent neighborhood stats).  I live 1/2 mile from the beach in Florida - market is booming since covid for ST rental, LT rental and sale.  

I'm stuck on whether to sell or do a 1 year lease for $5k/month.  If I sell, as a single taxpayer, I will pay capital gains tax on $250k.  If I rent for a year, I can net $1,500/month. The mortgage + expenses are $3,500/month including a home warranty that covers all appliances and HVAC.  

I've been renting it ST for the past 6 months.  I really really hate to pay capital gains tax. I'd like to buy another (less expensive) property with the proceeds, but I'm not looking to reinvest all proceeds right away.

What process do y'all go through to analyze the rent/sell scenario? Thank you!!

[Bruce Woodruff]

If you pay at the most likely 15% CG rate, you're giving $37,500 to the Gov't. That would be a big ouch for me. What about Refi'ing it and buy another local property?

Basically, you can give Uncle Sam $37,500, or you can make $18,000 a year, year after year. Just my .02