Critique and analyze my life!!

[14oclock]

Hey all, Ive been reading for a while, but this is my first post.  Sorry in advance for the long winded post!  Im looking for a little insight to our current financials and some advice about weather or not we should keep our rental property.  Wife (33) and I (38) are 3 years into our careers and thus are at the infancy of our saving/investing careers.  We both love our jobs, and plan to stay at them for as long as need be.  We live in a medium/high COL area in Colorado (a 3/2 SFR costs 500-600k).  We will never be high income earners (I’m just hoping our incomes track inflation, welcome to working for the public sector in Colorado! Haha) We plan to have 1-2 kids.  We don’t care to FIRE, we just want to make sure we are comfortable and have enough in the end.

Current combined stats:
Primary Residence:
Current market value: 425k, mortgage: 215k (15 yr fixed @ 3%). 
Mortgage (PITI+ HOA) 1900/month

Rental:  Property is 4 hours away.   Self managed.
Current market value 330k, Mortgage 135k (30 yr fixed @ 4.125%)
Mortgage (PITI +HOA) 750, Rental Income 1750

Roth IRA – 30k
Retirement accounts – 70k
Cash – 90k (10k for emergency fund, 10k for maintenance/repair fund for rental, the rest for potential down payment)
Income – 100k combined, w2

Question:  I was hoping for some input on our current financial situation and thoughts on what we should do with our rental given the following scenarios.
Scenario 1) Sell the rental and use the proceeds from the sale for a down payment on a new Primary Residence in our town (and turn our current primary into a rental).  I’m leaning towards this option for a few reasons.  The rental being 4 hours away could be a potential stressor (its not now, but I know that could change).  Our current primary is a small townhome (which we could live in forever), but a SFR could be nice as our family grows.
Scenario 2) Sell the rental and use the proceeds from the sale+ some cash to pay off our Primary mortgage, drastically reducing our living expenses.  If in the future we wanted to buy a new primary (and convert our current primary to a rental), we could always use a HELOC or a REFI to supplement cash for a down payment.
Scenario 3) Keep the rental, use cash for down payment on a new primary.  Turn existing primary into a rental. (although im not sure we have the income to support this)
Scenario 4) Sell the rental and put all proceeds into low cost index funds.  I'm not as into this option because I like the diversification of having real estate.
Scenario 5) Don’t sell the rental and keep everything as is.
Scenario 6) I dunno, something creative that I havent thought about!
 
So what do you all think?  We are just trying to make some good decisions now before our lives get more complicated.  Thanks!!!

[Watchmaker]

Question:  I was hoping for some input on our current financial situation and thoughts on what we should do with our rental given the following scenarios.
Scenario 1) Sell the rental and use the proceeds from the sale for a down payment on a new Primary Residence in our town (and turn our current primary into a rental).  I’m leaning towards this option for a few reasons.  The rental being 4 hours away could be a potential stressor (its not now, but I know that could change).  Our current primary is a small townhome (which we could live in forever), but a SFR could be nice as our family grows.
Scenario 2) Sell the rental and use the proceeds from the sale+ some cash to pay off our Primary mortgage, drastically reducing our living expenses.  If in the future we wanted to buy a new primary (and convert our current primary to a rental), we could always use a HELOC or a REFI to supplement cash for a down payment.
Scenario 3) Keep the rental, use cash for down payment on a new primary.  Turn existing primary into a rental. (although im not sure we have the income to support this)
Scenario 4) Sell the rental and put all proceeds into low cost index funds.  I'm not as into this option because I like the diversification of having real estate.
Scenario 5) Don’t sell the rental and keep everything as is.
Scenario 6) I dunno, something creative that I havent thought about!
 
So what do you all think?  We are just trying to make some good decisions now before our lives get more complicated.  Thanks!!!

The current rental looks to be a mediocre investment at its current market value, so selling it sounds good to me. How much do you think you could rent your current place for?

I wouldn't pay any extra on the primary house mortgage. Your interest rate is really good, and it provides a nice buffer against inflation.

In your shoes, I'd sell the rental and invest in index funds, but if you'd prefer to find another rental to buy, that's reasonable. I'd hesitate to suggest moving to a new house unless you've got a much better idea on what you need (size/location) that what it seems like in this post.

[LightStache]

Scenario 5. You have a house that's working for you and a rental that's working for you. Even if you could exchange your current rental for one with a higher cap rate, that would be likely be negated by transaction costs.

I have a bias to action and that makes it really hard to sit back and let investments perform uninterrupted. If you're similar, it could be the hardest thing for you to overcome on the road to FI.

Scenario 3 also sounds decent. When I wanted to get a second house and didn't have the income to qualify, I moved myself into a rental and got renters in my (former) primary residence. After six months I used that rental income to qualify to buy a new primary residence. It's an extra move and in retrospect it wasn't worth it, but that's what I would do if I was really itching to do something.

[14oclock]

Question:  I was hoping for some input on our current financial situation and thoughts on what we should do with our rental given the following scenarios.
Scenario 1) Sell the rental and use the proceeds from the sale for a down payment on a new Primary Residence in our town (and turn our current primary into a rental).  I’m leaning towards this option for a few reasons.  The rental being 4 hours away could be a potential stressor (its not now, but I know that could change).  Our current primary is a small townhome (which we could live in forever), but a SFR could be nice as our family grows.
Scenario 2) Sell the rental and use the proceeds from the sale+ some cash to pay off our Primary mortgage, drastically reducing our living expenses.  If in the future we wanted to buy a new primary (and convert our current primary to a rental), we could always use a HELOC or a REFI to supplement cash for a down payment.
Scenario 3) Keep the rental, use cash for down payment on a new primary.  Turn existing primary into a rental. (although im not sure we have the income to support this)
Scenario 4) Sell the rental and put all proceeds into low cost index funds.  I'm not as into this option because I like the diversification of having real estate.
Scenario 5) Don’t sell the rental and keep everything as is.
Scenario 6) I dunno, something creative that I havent thought about!
 
So what do you all think?  We are just trying to make some good decisions now before our lives get more complicated.  Thanks!!!

The current rental looks to be a mediocre investment at its current market value, so selling it sounds good to me. How much do you think you could rent your current place for?

I wouldn't pay any extra on the primary house mortgage. Your interest rate is really good, and it provides a nice buffer against inflation.

In your shoes, I'd sell the rental and invest in index funds, but if you'd prefer to find another rental to buy, that's reasonable. I'd hesitate to suggest moving to a new house unless you've got a much better idea on what you need (size/location) that what it seems like in this post.

Thanks for the insight.  Our current primary would rent for 2400.  Basically no cash flow, but the note is getting paid off fast being on a 15 yr mortgage.