I think Investor Alley might be the best place for this question but I'm unsure.
I am 31 and intend to move in the next 2 years. For a while now I have tossed around the idea of selling the townhouse I live in vs. keeping it for the rental income. Historically, home prices rise with inflation and rents rise with house prices, so for ease I assume the house would generate $16,000 (2014 dollars) per year for the rest of my life once the mortgage was paid off (or until I sold it). Using a 4% SWR, that income is the equivalent of having an additional $400,000 in my stash.
In contrast, the $100,000 of equity I have in the place will become worth $400,000 in 24 years, based on a ROR of 6% (inflation adjusted), invested in the market. That puts me somewhere in the neighborhood of age 57.
Strictly from an investment perspective neither scenario seems to have an obvious advantage over the other to me. Keeping the house means rental income in addition to a windfall (to be invested) whenever I decided to sell it. However, there's the risk of having bad tenants as well as the upkeep. If my equity invested now will equal the "stash equivalent" of yearly income from the house after only 24 years, the investment will obviously grow larger than the "stash equivalent" over my lifetime (unless I die young). However, selling the place eliminates one means of diversifying my income.
So I thought I would pose the question in case I'm missing something, as this forum has already made me aware that I have missed plenty up to now (but I'm learning!).