What should I do with my house to help me start?

[Joseph Carpel]

Hi guys, I'm new to the site here but have already gotten a ton of great info and contacts.

Now my serious question that has been bugging me for close to a year: what do I do with my house now that I'm getting started.

My wife and I bought it right in 2010 and currently owe about $214k on it. It was recently appraised for $310k (which I think is probably about fair market value).

In the 5 years living there, we have done a ton to the property. All of the following have been replaced in the last few years: siding, windows, roof, gutters w/ good screens, HVAC system (AC and furnace both), added insulation in attic, and landscaped.

However, while all this is great, we have done nothing to the interior of the house so I'm not sure how well it will present. The previous owners bought the house as a foreclosure in 2008 and some awful work was done to it. The main floor hallway and kitchen was re-tiled but over the old tile. This means I have several cracked tiles on the main floor. This was also done in all of the bathrooms. The kitchen cabinets are poorly done and the gas-line for the stove comes out of the floor so close to the edge of the cabinets that the stove cannot be pushed flush against the wall. So ideally the gas line needs to be moved or the cabinets shortened so the stove can sit along the wall. We also need new carpet and new interior pre-hung doors would really be great (and I mean for almost every door in the house; probably at least 8 to 10.

Now, I'm not sure what to do.

I was thinking of renting the house and buying another to live in which would then eventually become my next rental property. If I rent, I'm not sure whether to fix it up cheaply, nicely, or at all.

I then thought that maybe selling is a better option. We could downsize a bit and come out of the deal with probably $50-60k in cash, although some of that would have to go towards a down payment for our downsized house or condo. That would leave me with no rental property nor income but cash to start investing.

I also wondered if perhaps I could refinance for as much as possible, maybe $300k? That way we'd have the money for a down payment elsewhere, money to start investing, and keep our house as a rental, although our mortgage payment would go up so the cash-flow I was hoping for from renting the house would take a big hit. I suppose legally we'd also have to live in the house another year which I wouldn't mind if I decide to fix the place up.

Sorry for such a long post.

Any thoughts? I'd love to hear some ideas.

Thanks!