Trying to figure out if i should keep and rent or resell?

[Brett Lee]

We are trying to figure out if we should keep our house as a rental or sell and reinvest? (Sorry in advance for long winded question!!) Our house is in the Puyallup area (near seattle) in a very desirable neighborhood. It is the original house in the neighborhood and has a huge yard (.41 acres). The house is 3 BR and about 1800 square feet. Love the House and have always planned on Keeping and adding on or subdividing and building another house prior to reselling. House has some issues... Small amount of Water in basement at times, some sloping of floors in kitchen, questionable chimney and siding made of mdf or something like that. House is worth 350k as is with 3.75% interest and we owe 85k. Payments are $900 per month and cleaned up i could rent for $1600-$2000 per month. If we fix up some of issues at house I have been told it could be worth 380-400k We bought another house for $366000 that better fits our families needs. i am wondering if we should sell our house and put proceeds towards paying down or new house and recasting payments to lower them? Or other ideas? Open to thoughts ideas or suggestions!