Sell or Refinance?!?

[Kenton LeVay]

Hey BP Community!

I am faced with a pretty big decision and would love to hear what you all think. I am trying to relocate to Austin TX within the next few months and deciding on whether to sell my home or refinance & rent it. Here are the facts:

Location: Raleigh, NC

Estimated Current Value: $300,000

Outstanding Principle: $154,000

Monthly Rent: $1,600/mo (I could probably get more, but this is a conservative estimate)

New PITI: $1,230/mo

Estimated Capital Gains on Sale: $300 - $154 - $18 (6% agent fee) = $128k

Estimated Cash Back on Refinance: $240 (80% LTV) - $154 - $6 (refinance fees) = $80k

Some things to note: This has been my primary residence for the past 2.5 years, so no Capital Gains tax on sale. The PITI number above doesn't include other expenses (vacancy, capex, etc.). Assuming I self-manage and pass all utilities to the tenant, it's safe to say that my monthly cash flow would be $0/mo the first year. Obviously, more cash back now through a sale sounds nice but Raleigh is an appreciating market and I can't deny the long-term wealth building impact of holding on for the long haul.