Request opinions and direction on whether to sell or rent out my condo

[Jose Lucina]

Hi BP friends,

I am having some problems trying to identify whether to sell or keep my condo and would appreciate your expert help. I originally planned for keeping this condo as a college fund or downpayment house for my daughter. However, I am unsure if this will be possible and financially responsible in my circumstance.

Condo Description-; 2 bedroom, 1 bath, 2 parking spaces in an area that is in demand, an area that does not have capacity for any new developments or construction (cannot expand), is within 12 miles of three military bases, and in close proximity to a college campus. Easily rentable.

Sell Option:

Current Loan Balance- $355k

Sell- $540k

Expected Earnings (- excrow, costs, and realtor fees) = $145k.

Rent Option:

Current monthly payment (including maintenance fee, insurance) - $1150/month.

Rental expected (based off other spots in my building) - $2150/month

Cashflow expected: $700-750/month

Complicator : My loan is not a mortgage; it is a simple interest loan at 2.25% which expires in 3 years. After that, the rate would change to whatever the market rate is or I would need to refinance the property. I calculated a refinance at 7% interest + maintenance fee + insurance that my monthly payment would then turn to $2800. Which is more than I could charge for rent in this unit at this complex.

Pending forecast for inflation and for the market in three years, would I be stupid in trying to hold this property as a rental for three years and then selling it? After all expenses and fixed debts (with our new inflated home purchase) my wife and I only put away $1000 a month.  Would it be better for us to sell this condo and hold the money to reinvest somewhere else?

Thank you for your help and suggestion. I'm really stuck in the grey on this one.