Evaluating selling our current home vs renting

[William Walker]

Hey all, looking for some help evaluating selling our current house.  We live in Wilmington, NC and have one rental that has done amazing.  We are building a new house which will be done in August and have been back and forth on renting vs selling.  I'll post the numbers below, let me know if you have any additional questions.

A realistic selling price for the house is $175,000. Our current monthly mortgage is $1,000. My wife bought the house in 2010 for $145,000 using a FHA loan. We currently owe $124,000 on the mortgage. Out of the monthly mortgage $278 is towards principal, $516 towards interest, $206 escrow. The house was built in 1997, 1,100 sq feet on .30 acres, 3 bedroom 2 bath. Roof replaced 2 years ago, HVAC replaced last year, new SS appliances 2 years ago, new wired shed, renovated bathrooms with everything new except shower and floor, new kitchen counters and sink. Realistic rental rate is $1350. The market in Wilmington is fantastic with house prices and rental rates going up. Due to the hurricane late last year there isn't much housing available so it's a great market to sell and rent.

The reason we wanted to keep it as a rental is that we already have 9 years invested into it so we are starting to make some process on the principal and we are wanting to grow our rental portfolio.  Realistically we'd be doing ok breaking even with cash flow at the end of the year, but we'd be paying off more of the principal.  If we sell we'd take the cash to furnish the new place and pay off some credit card debt that has interest >10%.  I think all signs point to selling but curious on other peoples thoughts.  Thanks!

[Joe Prillaman]

@William Walker, I am a big fan of the buy and hold strategy. Long term the property will pay you more and you will continue to benefit from appreciation and tax benefits. Why not take an equity line of credit and pour it into more investments?