rent ,sell or refinance primary home

[Deb W.]

Hello all,

We are a married couple that are now early retired, 62 and 63. We have very little income and are not collecting Social Security yet so are living off of savings and looking for some cash flow. We own our own home free and clear which has appreciated nearly double in 6 years to $515000 and is fully paid for. The market has become very expensive where we live. We are debt free and have a lot of assets (mostly tied up in IRAs)

Should we rent out our paid for home which would bring about $2500/mo before expenses and is in a popular rental area? or try to get some of the equity out by refinancing if we can? Or just sell, buy a different primary home and look for a cheaper market for a rental? It seems that renting would be more lucrative for cash flow and we would only have to manage one home- but we would have to finance another house for our primary home which would lessen the cash flow. Also, we have considered renting our home for vacation short term renting, but that would be  difficult to find a place to stay while doing so.

We also own half of a vacation home in a different state, but have never rented it. The HOA only allows 30 day or longer rentals and we do want to keep using it about 2-3 times / year. Its not an option to sell this house at this time.

We are new to the idea of leverage since we grew up with the old rules of investing in a 401K and IRAs and save and save. We have looked at perhaps moving some of the IRA money to a Self Directed IRA but have read many posts that they are not the best option. We just aren't sure about finding a loan with no income.

We are new to the cash flow idea so are confused by all the choices. Thank you for any advice.