Sell or rent out gifted property

[Gabriel Rinato]

My parents are downsizing and want to transfer ownership of one of their homes to me. I was using this home as my primary residence but am looking to move and start investing in real estate as well. The home is located in suburban NY and is worth 555K. There is no mortgage on the property. Taxes and insurance are about $21,000 per year. I can rent the property for about $3500 per month but it is not a market where many people rent houses. Most of my net worth is in stocks and a business. I have no other real estate and am 46 years old

I am trying to decide whether to 

1. Do a cash out refi for 350K, invest proceeds and rent the home for $3500 ish per month. The total payments would be roughly equal to the rents. Hold the home as a rental

2. Sell home after 2 years to get the 250K cap gains exemption. The original cost basis is $72,500 so there would be cap gains owed on the property. Use proceeds to invest.

One other note, I have enough saved + the credit and income to buy another property so the proceeds would not be used to buy another property and I wont be renting. 

Curious what others on the forum would do in a similar situation. THANKS!