Should I sell or keep our condo?

[Ishtiaque Hussain]

My wife and I have a condo in Bala Cynwyd near Philadelphia. But we recently moved to New Jersey and bought a single family home. Now we have rented out the condo and have a good tenant - which covers our mortgage for it. Sounds perfect, right? 

But the new home that we purchased, with over 6% APR, we are paying a hefty amount for mortgage, PMI, etc. We don't get to save much after all the bills.

Now, should we sell our condo and use the balance in reducing the principal on the new house, and hence lower the mortgage payment? With lower APR in no sight in the near future, would this be a good decision? Or should we keep renting out the condo and refinance in a year or two?

Thank you in advance!

[Andrew Freed]

@Ishtiaque Hussain - Was this condo your primary residence for more than 2 years over the last 5 years? If so, it might make sense to sell it and grab the tax free money.... $250k for a single person and up to $500k for a married couple. At the end of the day, it all comes down to return on equity. If you are cash flowing 1000 a year from the condo and you have 100k of equity, that equals a 1% return on equity vs the cash flow which is minuet at best. You want to try to get that above 6% for an asset. 

Nonetheless if you did sell the condo and grab the money, the other question is can you get a higher return than 6% in the market vs paying off your mortgage. I would think most people can get above a 6% return investing it elsewhere hence I think it makes sense to keep your mortgage as is, reinvest the money into another asset that provides cash flow in excess of 6% and use that cash flow to support your higher mortgage payment.