Sell or Rent my first potential Rental? -Asheville, NC

[Craig Ruhland]

I moved to Asheville, NC about 6 months ago. I paid cash for a $240K home and have since remodeled the home. Updates, paint, new kitchen, some flooring, etc. etc.  Overall dropped about $25K into the home.  Spouse, me plus (2) kids been living in the project. I'm walkable to downtown Asheville (Montford neighborhood). 3bd 2bath home, 1200 SF. I think i can get $2000/month for rent. I'm guessing this home would sell pretty quick at $300-310K. Taxes/insurance on the home are about $2,000/$1,000.  

Moving forward, as a rental, the home would require very little maintenance. Roof, siding, paint, deck, HVAC are all in great shape. Kitchen & bathrooms are very nice; in retrospect, i spent too much on the kitchen.  

My wife and I are ready to move on to the next home (our primary residence; $450K'ish). We have plenty of money for the down payment for the next home, but are curious if others on the forum think we should sell this home or rent it.  The home doesn't quite meet the 1% rule (obviously). This home would be our first rental. 

Any advice or thoughts from others would be great. It seems like a no-brainer to keep the home and use it as a rental (taxdes, income, etc.), but want to get thoughts and opinions from others here on the forum.  Thanks in advance for any thoughts; cheers.  

[Ryan Howell]

My recommendation is to assess the property as if you did not own it yet to help give some clarity.  Would you buy it as a rental with those numbers or flip it?  I have one as well that likely I will sell because it does not meet my criteria as a rental, but I can still make money on the property flipping.  I would likely sell it and utilize the cash for buying rentals that do meet your criteria.  Take into account the potential missed opportunity costs you may miss out on by keeping your capital in this deal.

All that said, that doesn't mean that I would sell right away.  I might would try to live in it long enough to avoid capital gains.