How to Determine if Selling is a good idea

[Greg Zunich]

I have a duplex-like property (2 house on one lot) that I bought as a primary residence back in 2017 using 3% down I purchased for less than 10K down. I lived in one house and renovated the entire place during this time. My fiancé and I now purchased a primary residence which we will be staying in for the foreseeable future and we are determining if selling the 2 houses on one lot or renting the other unit.

Selling around 240K will put 60K in my pocket after everything is said and done including taxes from deprecation and all fees. I have about 20K in cash into the property from renovations, 30K total with down payment. The house has almost doubled in value over the last 4 years. 

Rents will be about 2200/ month and putting money aside for cap-ex, vacancy, and repairs, cash flow will be around $400/month. My property management company does a fantastic job handling everything, so its essentially mailbox money.

Since I have lived in the property up until June 2020, I can avoid capital gains, so my window is open until June 2023. I will either hold for a very long time (has always been the plan since purchasing) or sell during that period

Option 1: Hold and continue to rent the houses for years and years to come. PM company ruins the day-day, and I see a gradual rent growth as well.

Option 2: Sell, take the gains and use as my down payment (20%) on a property in the 300K range. It is slightly more it value than the current property, but take home rents will be similar or less than the existing property

Option 3: Sell in a year or two hoping the housing market continues as it has 

Option 4: Sell, hold the cash on the sidelines waiting for a market correction, looking for buying opportunities.

How would you all handle a situation like this? I have run all sorts of numbers on these ideas and there is not a clear winner in any direction. I am leaning towards option 3 and if the market turns in the other direction, I will just hold long term and rent.