Sorry been busy and have some catching up to do. This is my pretty standard advice for someone like you in this situation.
If you have no tolerance for risk, sell it now.
If you have even mild tolerance for risk, keep the TH for now, rent it out and buy your next home.
It will be easier to buy your next home with the flexibility to not have a property to sell. Use that to your advantage!!
Rent it for 2 years, ideally 2 1/2 years. At that point decide if you want to be long term landlords.
If not you can still get $500K capital gain tax free, you’ve paid down loan more and you’ve been cash flow positive. Bonus you might get some appreciation. Target to get it on the market in early Spring 2026 if you are going to sell it.
If you find landlording to your liking/benefit/tolerance keep it long term and enjoy the passive income which grows over time as RE taxes and mortgage are basically fixed.
