Primary Residence to Rental - Advice on Next Step to Scaling

[Kevin Brown]

Looking for advice on what my next step should be and how to expand my real estate portfolio. Bought my first house (primary residence) in Denver, May of 2021, 3bd x 1 bath, for $525k with $85k down at an interest rate of 3.25%. Current PITI just over $2250 with a balance of $415k. Redfin/Zillow show an estimated value of $600k. I have made some upgrades since living here, fully renovated the bathroom and laundry room, upgraded appliances, added a tankless hot water heater, and replaced all galv. pipe with pex. I think if I were to sell it now I could get around $600k, maybe just below.

My company is moving my family and I to NYC and will be covering our housing (rent) for at least a year. With my company paying for housing in NYC it seems to be a no brainer to rent my house in Denver. Looking at rentals in the area I think I could rent the house for somewhere between $2400-$2600, which doesn’t leave much room for maintenance, vacancy, and a property manager(assuming this is necessary since I will be so far away). If I was to return to Denver I wouldn’t look to live in this house.

Should I rent for the next 2-3 and sell just before the 2 of the last 5 years rule? Hold long term assuming renting is consistent? Or should I sell in the near future?

Don’t have another down payment saved at the moment but have some company stocks that will vest over the next few years that could amount to another down payment. Housing in the NYC area is obviously more expensive and will likely require a larger down payment.

Thanks

[James Carlson]

@Kevin Brown

Don't sell. 

Denver was just ranked the hottest housing market in February. And while i haven't seen it reflected in the monthly reports, from helping some house hacking clients and some other first-time buyers in Denver lately, I can feel the market heating up -- more homes going in the first weekend, more going for over asking, more multiple offer situation. 

if you're breaking even, then great. If the market appreciates even a conservative 3% each year, you're home will be with $636,000 in two years.

You can always reecaluate in 2-3 years before the capital gains issue kicks in, but all signs are that homes in Denver will be go up in value between now and when you really need to make a decision.