Should I rent our duplex or sell it and use the equity for our new house?

[web4kev]

My wife and I have been in our duplex (we live downstairs, rent the upper) for about 2.5 years.  We're now looking at buying a larger single-family house.

My question is whether we should sell the duplex and use the equity to buy a nicer house or if we should keep the duplex and rent it out and try to scrape together the down payment to buy a larger house and maintain both.

The rent money would just about cover the monthly mortgage payments of the duplex, but I'm worried about owning 2 properties and the possible maintenance involved.  Plus I hear you get nailed with a big capital gains tax on investment properties when you sell and haven't lived there for more than 3 years.

Yet, I'm tempted to keep the property and use the equity as a retirement nest egg.  Any advice?

[Yvonne]

Unless you can keep a real close eye on your renters and how they treat your place, I wouldn't rent.  Most people don't care enough about your stuff.  I'd sell.
We've rented for a while.  Big pain in the rear.