What to do with wife's rental

[Michael Abernathy]

My wife has a home she brought into the marriage.  She purchased it around 2006 for $200K with the intention of tearing it down and rebuilding or doing a complete upgrade on it.  It is in a very desirable neighborhood.  We all know what happened a few years later.

Fast forward to today....

She rents it out for $1,100. The note is $1,180. She has an ARM that is currently around 3.4% and she owes around $154K

She is worried that as the economy improves the interest rate will steadily rise so she is wanting to dump it and try to sell it for around $160K.

We haven't had it appraised but Zillow lists it at $185.

I would love to keep it but not sure how to make the numbers work.