We’d like to buy a new home + keep our current as a rental, but..

[Jeffrey Waldron]

Weighing the pros and cons of a scenario where we keep our current home as a rental, as we buy and move into a larger place. Our small house is in a great area of Eagle Rock where rent will cash flow positive. In the last five years, the house’s value has gone up more than $200k. We have a 3% loan and low payments. We’re approved to purchase another home without the need to sell. My biggest hold up is accounting for the loss of capital gains tax exemption, and being on the hook for taxes on the gains if we decide to eventually sell the rental. How do we get around this? Move back in for two years before selling? Any thoughts from people who have been in similar dilemma’s welcome, as well a those who know the LA market! Thanks! -Jeff