Byron, personally I would cashout refinanace into a 30yr to keep the payment as low as possilbe and then rent it out once you are ready to move out of state. Appreciation in Travis county is right about 5% on average over a 63 year historical view. Last few year have been high, in some areas, like Georgetown, we saw 80% appreciation, which is wild, but a 63 year historical view is much safer approach for the long term, so using that 5% in 5 years you would be up 25% or more, which is great. Also as far as cashflow, are you considering the depreciation and all other deduction allowed by the IRS. Once this becomes a rental you treat it like a business in the eyes of the IRS and you can deduct much more.
Bottomline it all depends on your goals. Are they short-term, 2-3 years or are they long-term? And Remember you can always 1031 exchange to avoid capital gains taxes, and buy another rental, like a multiunit, etc and grow your rental portfolio, but it all depends on your goals. There are so many questions on this scenario, I love it!!!! Tell us more. :)
