Sell before the "2 out of 5 years" tax free window expires?

[Abe Alam]

Hi folks, looking for some advice here...

I have a rental property that is in a high demand neighborhood. Its a 4/3 home that has 175K mortgage on it and is worth roughly 310-325k now, but could need some renovations (like a new roof and minor things) to get top dollar . I have lived in this property for 2 of the last 5 years, but after March 2024 that window expires. 

I was thinking about offering a lease option agreement to my current tenants or offering to sell it out right. It currently cashflows $500 per month. With the proceeds I'd be looking to buy a multi unit or BRRRR.

What would you do? Take the tax free money while you can? Or hold on to it?