Upgrading to new home, keep existing?

[Jesse Fatula]

Hello!  I am new to this forum so please bear with me.  

I am 31, married with 2 children and we are currently living in a 1100 sqft 2 story home in a residential neighborhood.  We are planning to move to a larger house to make room for our family.  My current home is valued approximately $115k with $86k remaining on the mortgage.  The house is old (1918) but completely updated and has no major issues other than an old furnace which still in perfect working condition and the need for a new roof soon.  We have a large cash payment ready to cover 20+% on our new home.

I have been debating with myself whether to sell this house for the little bit of equity we have, or to make it a rental.  We live in a lower income area (Johnstown, PA) but plan on staying here based on my current employment situation.  My wife and I have our first rental property in our 3 year plan, but are not sure if it should be this home.  I am currently reading the beginners guide book but am not complete with it yet.  It has been some great information but I am hoping someone can point me in a good direction for my current situation. Thanks!