Do I sell my primary house or rent?

[Patrick Chafe]

Hi All, 

Looking for some opinions on a situation i am in... 

My fiancee and I recently bought a new home and i am trying to decide whether to keep my current primary and rent it out, or sell it. Here is some background on the property: 

Description: 2,100sf(this includes finished basement), 1/4 acre lot, 4 bedroom, 2 bath, garage 

Info: I bought the house in 2020, the week that the world shut down due to covid and have a rate of 2.99%. Before I moved in, I completely renovated the entire house. I got a market analysis from my Realtor and she is thinking that the house average worth is $700k. I owe $454k on the mortgage and after realtor fees/closing costs, i could net $200k with no capital gains tax. 

My Thoughts If I Sell: I have another single family rental and my plan was always to keep this house as well to have (2) SFH rentals. However, i never expected it to appreciate so quickly. So now, i am considering selling it and paying off the majority of my first rental (I owe about $255k so i could payoff a big chunk and pay off the rest with added payments over a year or two), or put the money into stocks and grow it from there. My rental has a mortgage rate of 3.5%. If i paid off my first rental, it would bring in $2750/mn (before quarterly taxes/expenses) and then i would have a bucket of equity to tap into if i ever wanted to buy more property. If i did sell, i am not sure which way i would go, because the stock market would(hopefully) do better than 3.5% so technically i would make more by putting it into stocks, but it would feel really nice to have a property paid off.

My thoughts If I Keep: I could keep the property and rent it out for around $4,000 it looks like and would make approx $1400/mn before expenses/Cap Ex, assuming I manage it myself. The nice part is, I renovated the whole thing in 2020(new shingle roof, new siding, new heating system, new HW tank, new kitchen, etc.) so I dont foresee any big CapEx expenses in the near future. A couple concerns i have are, with buying a new home and renovating that, i wont have much money to make it rent ready like paint patching, cleaning, mortgage payments until renters move in, etc. Another concern i have is the backyard has a BIG hill which is pretty dangerous to mow and could be a liability, however i could always include lawn care as part of the rent to avoid safety issues. Down fall is now all of the equity i have is split into the (2) properties and would make buying another property in the future a little more difficult.

Any thoughts or opinions are appreciated. 

Thanks!

-Pat