@William Carr, @Nicole A. is right on the money. Many people here wish they had held on and rented, but just as many have horror stories of holding onto something that wasn't worth it just because they felt like selling an asset was giving up on appreciation potential.
What you need are some solid numbers. Like Nicole said, you need to have a firmer idea of what you could get for it, and what it would take to make it rent-ready. Big ticket items like HVAC, boiler, etc will need to be replaced if they are still original. Even if they were replaced in the 90s or 00s, you might be looking at a replacement sooner than you think. Other big items like flooring wear out A LOT faster with a rental - and I know the carpet is new, but you'll likely be looking at replacing that with something tougher in a few years time if you decide to rent it out.
Now, if you can rent it out for a good amount ($2500 maybe? I don't know your market) and assuming your mortgage above includes insurance and taxes, then maybe it's worth it, but you need to have a realistic idea of what you can get and what your costs will be, both short and long-term.
The great thing about selling will be that you can get all your capital gain tax-free, since the Sec 121 exemption allows for $250k (single)/ $500k (married) of tax-free gain on the sale of a primary residence that you've occupied for at least 24 of the past 60 months, which it sounds like you definitely have. So that's some tax-free cash in your pocket. You would still need to pay the depreciation recapture tax, however.
If you don't need the cash and your primary goal is to keep that capital working for you as an investment, you could always sell and use the tax-free equity to buy something in a cheaper market. Heck, with $100k or so in equity (just guessing based on purchase price and how long you've held it) you could put down payments on 4 solid cash flow properties here in Birmingham (and likely other markets in the South and Midwest). Ours rent for an average of $950 per month, just as an example, so it might behoove you to run the numbers on what you could get with that money and which scenario makes the most financial sense. If you need to spend $15000 to get the house rent ready and then can only barely cover your mortgage, you could most definitely be putting your existing capital to work in a more efficient way.
I would suggest your first step is to determine how much you could make selling it, how much it would cost to make it rent-ready, and how much you can reasonably rent it for (and be conservative). Then do some research on good rental markets and take a crack at seeing what your sales proceeds could buy you. Runs some numbers and compare your options logically. The answer will present itself.
As Nicole said, don't let the regrets of other people drive your decision. Everyone in REI has regrets and successes, and everyone's start is a little different. Just do what makes the most financial sense.
If you have any questions about the Birmingham market, feel free to reach out any time!
Good luck!
Clayton
