Rent or sell?

[Joel Watson]

I'm 31 and I'm 5 years into a house. The house went for $80k at the time and I received the first-time homebuyers credit of 5k. It's been great living there, but it is a cottage and very small. I'm currently engaged and we both want out. The problem is that I believe I would break-even if I sell. It is assessed at 92k and I owe 73k - on a 15 year mortgage (fixed, 13 years left - refinanced after living in the home for 4 years). Here's the catch: my fiance is in college. She's 36 and only make 10k per year, but she is going to school for computers (she has about 3-4 yeas left). I make about 55k a year and I'm due for a raise every August (I teach). Our mortgage is only $811 a month, fixed. Options: Rent it out for 1k a month. We would have an investment and in about a decade we could sell, take equity, or rent and make profit. The catch is that we would only get about $120k-$140k for a second home on only one income and two mortgages with student loans (they are fixed; 15-years at $464 a month and I pay more on them). Aside from the stress of possibly losing a job, we wouldn't get the house that we really wanted - but we would (potentially) have a huge investment in just over a decade (retirement), even if the house were to not sell. The second option is to just sell the house and buy the house we want. We would be able to afford it and live happily ever after, but we would break even on the home that we currently have and lose either 1. 80k that someone else pays/2.a grand every month for life/3. possibly a sale of the house at the $100,000 mark (went for $130k in 2006). What should we do?