Make sure it's a builder w a great reputation.

As a consequence, there is a huge manufactured home community.

@Robert Thompson, echo what @Jason Dillard said about talking to your accountant regarding actual tax consequences.  

What if you didn't like this particular contractor or you discovered they did not have a good reputation? 

I see  big funds bid so high it is clear they didn't know the consequences of their bids.

Your question is really one about opportunity cost since there are no tax consequences if you sell and qualify for the primary residence exclusion.  

The good news is that she cared enough about her reputation that she complied with my 30-day notice and gave me no further trouble.4.

@Matthew Fritz1) Always run your own numbers for CMA2) Make sure the operator has a good reputation for more than just a year or two.  

And I would definitely to that because out of town rentals are hard to deal with.If you can get a LOT of cash out of it, tax free with the 121 rule, if you've lived 2 of the last 5 years, but because you've rented it, there are some tax consequences, regardlessReasons to keep:You have a good note on it, Rental market is strong there and you have a good tenant.You don't have enough equity to make much difference but have reasonable cash flow (sounds like that's where you are, $30K is not much, and you do have a 5.6% return on equity, plus depreciation, inflation and mortgage pay down. )For "me", I'd sell and get something closer to home.

The consequences for screwing up can be a lot higher than buying REOs.