Hi All, I’m in a financial dilemma and was wondering if there is a different perspective I might be missing here.
I have a rental property that I’m thinking about selling but I have positive rental income on it currently.
Here are my financials:
Single, no kids (Want to get married and have kids in the next 3-4yrs) Income from job: 160K annually Primary residence details: Mortgage: $672K Value of primary home: $750K Rate: 6.25% Monthly payment: $4900
Primary home is in a developing area, potential for value increase, good school district. Most importantly, I absolutely love living here.
Rental property details: Mortgage: $332K Value of rental property: $640K Monthly mortgage payment and expenses $2050 Monthly rent( after property management fees): $3000
Other financials: Retirement savings: $190K Taxable savings: $72K HYSA: $17K Debt: mortgages + Auto loan at 1.24% with a balance of $7.3K
I’ve also invested in real estate by building a retirement home for my parents where they live ( outside the US) and the equity on that is ~$450K
Now the dilemma: Option 1 I’ve lived in the rental property as my primary residence until 2023 april ( at least 2yrs in the last 5yrs) so I won’t get taxed on capital gains upto $250K if I sold it before April 2026. My renters are vacating in August 2025 so I was thinking I could sell it then. I would probably gain $270K that I’m thinking about paying down my current mortgage by $100K and investing the rest in HYSA and ETFs
Option 2 would be to keep renting and possibly incur additional expenses in the future. ( may not be major expenses since I replaced my AC units and heater in the last 3yrs) If the rates get lower on my primary home, I could refinance and pay off the loan with the excess funds or even refinance for 15yrs at a lower rate( but cash risky)
I bought my primary home in April 2024. I could move back into my rental property after a year and sell ny primary home but I’m not inclined to do that since I love living here. I bought this house based on certain future plans of starting a family but that didn’t work out and life had its own plans. But waking up to the sunlight and this beautiful home is kind of keeping me sane tbh.
Any perspective appreciated.
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