Sell homestead or convert to long term rental?

[Kelly Flatt]

Hello BP,

We are upgrading our personal home and trying to decide whether to sell our current home tax free thanks to homestead or turn it into a long-term rental. Does anyone have a concise formula for this? With no risk/ work investment at 5% or more, do we risk the equity we've accumulated and add another tenant to deal with or just take the cash and wait for a downturn to buy another property down the road?

A little background-

We bought our house in 2008 for 172k, it's worth about 550k now. We've done some improvements, but most of the equity came from the market and location. We are in a great neighborhood in St John's county FL, the best school district in the state and one of the fastest growing. Rentals rates have also risen steadily here, we could get about 3k a month. Home is paid off so limited overhead.

We already own/manage 2 STR, 1LTR, and 4 owner financed land contracts, so we are not complete newbies. We are planning on staying in the same area, so we would self manage this one as well.

I don't think there's a wrong decision here, but we would still like to make the best one.

Thanks in advance!