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Big new home purchase... help whether to sell or rent current home (newbie investor)

We live in a desirable HCOL area (CA) and have a very affordable payment on our current home. However, we found an amazing place that better suits our family's needs and went for it. We've decided to buy, that's not in question. Here’s the dilemma - what to do with our current home.

- Current home: worth $2m, $800k equity, all in payments $5k/mo (at 3.5%), estimated rent ~$7k/mo

- New home: $2.5m with ~$15k/mo payment (which we clearly afford but still gives us heartburn)

We’re buying without contingencies and have other ways to come up with down payment. Almost all of our NW is currently in stock, so it's probably a good idea to diversify even if we didn't buy this house. The two options I'm considering:

- Sell and pay down the high interest mortgage (recast) in our new house by another ~$800k

- Keep and rent it, cash flowing up to $2k/mo and enjoy potential future appreciation

The idea of lowering our $15/mo mortgage would help me sleep better at night. However, the idea of giving up a valuable property that cash flows with such a low interest rate seems like it may be foolish. I’ve never owned a rental property and am not opposed to being a landlord longterm, but it is counter to the objective of trying to simplify our lives with this move.

Our goal is to retire early in the next 5 years and we're well on that path even if this purchase sets us back slightly. I'm not a finance whiz or a real estate guy, so I would love any advice based on the situation above. Huge thanks to all I’ve learned from here!

TLDR: we are buying a bigger family home and need to decide what to do with our current house - sell now or keep and rent it - in order to keep on track to retire early

submitted by /u/Competitive_Pass8370
[link] [comments]

source https://www.reddit.com/r/RealEstate/comments/18jl7je/big_new_home_purchase_help_whether_to_sell_or/
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