Advice Needed- Rent or Sell

[Brandon Fitz]

Hey all,

I am currently in a conundrum. I bought a property roughly three years ago. At year two of owning the home, we refinanced (since interest rates were so low) and have since moved out and now rent to a tenant. We are making about 300ish more a month than our loan payment is. Currently, we have reached out to approximately 4 realtors to give us a price estimate and they are all roughly 30-40k more than what I purchased it for. I am looking for advice or opinions on how to handle the situations listed below:

1. Do we continue to rent to the tenant making roughly 300 a month. All of these funds go into an account and have not and will not be touched unless there are repairs that need to be done to the home. By doing the math we could make roughly 30k in about 7ish years (including the principle which is being paid off of the loan). We have considered increasing rent at the end of the lease. However, the market would probably say that we could not go up much– if any. 

2. Do we list the home while the tenant is still in the property? We attempted to sell it to the tenant, however, after many attempts to negotiate a fair price, negotiations fell through. We understand that having a tenant in the home could be a turnoff for many people seeking homes now. 

3. Do we wait until the lease is up in August to sell? The issue I see with this option is that if interest rates were to go back up between now and then there could be an inverse relationship between the price of the home and interest rates. I.e. when interest rates go up, the home value goes down. 

My wife and I are wanting to have a passive income but we are not sure if this is too good of a market to not capitalize on the huge increase in price. Thanks, everyone in advance!