Sell or Rent primary residence?

[Oliver Martin]

Hi everyone.

I have a primary residence that I bought in 2012 for 250k. It is now valued at $450k. I lived in it from 2012 to 2015. Rented it out from January 2016- August 2019. My original plan was to move back in and sell it after two years. Unfortunately, I made a mistake and did not know that the 2/5 rule for the 121exclusion only applies during the first 5 years of ownership (pls correct me if I’m wrong).

I purchased and moved in to a smaller house in January 2016. Purchase price was $160k. Current value is $240k. Loan balance $70k. Interest rate 2.5%. Mortgage $1050. Hoa $120. Potential rent $1400.

My question is this. Should I rent it out for one year and sell next year? I believe it is safe to keep it until election, and it will be more unpredictable after. Or just sell now and pay down the balance of the bigger house? Pros and cons. I’ll have one more year to pay down debt on small house.. Then pay off big house after. Or sell it now, don’t have to take a chance with a bad tenant, pay down bigger house. The house shows great right now and does not need any updating. Will probably need minor repairs or paint if rented for one year. Both houses are in Las Vegas.

Thank you.