To sell or not to sell, that's the question

[Julie S.]

I purchased a primary residence about 3 months ago and have a mortgage. I’m trying to decide on my options with my previous primary residence with no mortgage and worth about $520,000. Previous residence is all fixed up and in great shape.

Option 1 – Rent previous primary residence. Rent amount will about cover the new mortgage….costing me about $300/mo extra. I can keep it 3 years and then sell with no tax penalty but how much will the market really move it 2-3 years. If market is good in 2-3 years, sell and payoff current mortgage. Open HELOC to use as needed. Downside – may have to put work into house to sell depending on tenants.

Option 2 – Same as option 1 but hold/rent for long term (10-15 years) or forever and/or can utilize the 1031 exchange down the road for another property or take the tax penalty as it is a goal of mine to payoff primary residence.  But if I decide to sell in 10-15 years, I still may come out ahead with the tax penalty.

Option 3 – Sell now and payoff current mortgage. I can open a HELOC and use for purchases as needed.

Which option would you choose and are there any other options?

Thanks for your help!

Julie