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ADVICE NEEDED: to sell or lease out? (TX)

I really need some advice here. My wife and I bought a new construction house in Austin TX in November 2019 for $273k. We had planned on eventually buying a different home for us to move into, and to lease out our current one. Due to how quickly prices were going up, we decided to act fast and are now under contract for a new build outside of Austin. It is $320k and is expected to be complete in February.

Here’s the dilemma: Our neighbors just sold their home for $485k, and they have the same floor plan as us. We are near the new Tesla that is being built, so we are expecting that values will continue to increase, although of course there’s no way to know for sure. Because of how much they got for it, we are considering just selling it to keep that profit (we owe $265k on it). Our mortgage is $1680/month (but will likely go up a lot from property taxes) and the homes in our neighborhood are being leased out for $2,000-$2,400/month. With taking capital gains taxes into consideration, should we hang onto this property and lease it out or sell it?

Also, will capital gains taxes still apply if we held onto it for 2 years and then sold it? We will have lived in it for 2 years, and then leased it out for 2 years. I’m not sure exactly how that works. How much are regular taxes for selling, if we just sold it outright?

I know it’s a lot, I am super appreciative of anyone who may be able to help!

submitted by /u/frostedturtledove
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source https://www.reddit.com/r/RealEstate/comments/nph75e/advice_needed_to_sell_or_lease_out_tx/
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