This is a great Q – one I will have to deal w/ in a few years. I haven’t put a spreadsheet to the problem, though. My intuition tells me it is a close call. Some considerations come to mind:
– House value appreciation expectations
– Inconvenience of being a landlord.
– Cost of property management
– Expected vacancy / lost revenue
– Will selling help you get over 20% down to avoid PMI ?
– Mortgage rate vs. Return on equity
– Could you to retire / downsize back into your old house after living in the new house?
– Closing costs of selling
Also, keep in mind – if you don’t sell, you can try being a landlord and change your mind if you don’t like it. If you do sell, it is difficult to go back the other direction.
