Selling my precious primary residence or not

[Linus Cui]

I bought my first primary house 6 years ago, and two years ago I bought another one and moved in as primary residence, and the old one was rented out, the rent is just enough to cover my mortgage. It has appreciated about 200-300k during the past few years, it is time for me to consider if I should sell it now so I don’t have to pay the tax for the appreciation or just hold it and rent it out .

The areas is in Bothell, Kenmore area in Washington.

I would like to get advices which option would you choose and why?

Thanks a lot.

[Darius Ogloza]

Not sure if by "mortgage" you actually mean "mortgage" or entire "PITI"? If the former, a sale is almost certainly warranted as you can avoid tax on the appreciation having lived there 2 of the past 5 years. If, however, the property covers PITI, you have a closer call given that with each passing year the property will become more profitable to you and you live in a prosperous and growing part of the country. I tend to have a strong prejudice for buy and hold but in your case I would strongly consider selling because of the tax effect and likely increase in capital gains we will be experiencing in the years ahead.