New here, potential first investment questions

[Austin B.]

Hello, I am new here. I currently own a single family home on a 1/2 acre lot in Utah. I was considering selling my house outright, but I have not lived in it for the complete two years, which means $$$ to IRS, so not fun.

A family came to me wanting to do a rent-to-own on my house. I'm very nervous about that since I know you have to fix the sale price upfront. I am considering a straight rental to them for the time. They are very persistent and tell me how much they love the house and it would be the perfect place to raise their family. I'm sympathetic to their needs, but I need to go into this with both eyes open, if I choose this route.

I'm a 31-year-old single man and have a friend who is my roommate. We'd likely still be roommates wherever we end up. I make $140k / year as a software engineer but have almost no cash thanks to my spending habits. If I rented my house to this family, I would need to set the rent high enough to cover my own expenses because I will need to rent another place to live. My mortgage is $1488 / month and yes, that does include PMI.

I wanted to get some opinions. I would love the increased cashflow. I want to get into real estate eventually. I could pay off all my non-mortgage debts and move into investing more quickly. However, there are a number of risks involved. I am not sure which route to pursue at this point in time. A number of my family members think this is a stupid idea; granted, they're all in lots of debt and have no RE investments. My main goals are this:

1) Increase income (cashflow)
2) Live somewhere I don't hate
3) Have a garage so I can store my bikes (big road cyclist here) and organ (I'm an organist and have a couple organ projects)