The 1% rule is the metric that is commonly used. It says that 1 months rent/FMV = 1%
So your house should be rented out at $4,300 a month.
Congratulations you made a TON tax free money on appreciation, time to sell and move onto the next project.
Think of your house like a stock. In 5 years it has quadrupled in value. It is time to sell it. Oh and the kicker it is not taxed. OR you can continue to hold the stock for the tiny dividend that it pays out ever month.... Your call
A home is just a collection of construction materials, 2x4.'s and nails. Sell yesterday.
The 1% rule doesn't really work in any property market where prices are more than about $300k. Rents are just never going to be high enough. It also doesn't work in any market where the majority of your returns come from appreciation, not from rent.
And yet, our OP friend has done quite well in a market like this.
There is never only one way to skin a cat, which is what you 1% followers seem to be blinkered into thinking when it comes to real estate.
And to think of it as a stock that you should sell just because it has gone up in value a lot - that's even more bizarre.
Do I dare mention Amazon? A stock that makes up 5% of VTSAX and pays no dividends? It's like telling OP to sell it when it quadrupled in 1998 to $6 a share.
Time after time we see corporate executives and directors feel the need to "do something" and they screw up their company by engaging in mergers, acquisitions, divestments, restructures.... sometimes it's best to do nothing for a while.
I was trying to put it in different terms that might help the OP make a decision. However house that has gone up 4x in 5 years is pretty amazing and unlikely to happen again. Perhaps it would be like owning a growth stock that you catch a perfect five year run. Be it 400% or 40,000% it is unlikely to happen again is it not? Amazon is not going to go up another 10,000% nor is his house going to go up another 400%.
The 1% rule has been around for a long time and for good reason. Sure it does not always hold true. But here it shows why it could be a good reason to sell.
The OP pulled some money out to put into the next project, which is good. However his return is downright terrible.
Holy crap, just did the math, the payment on this place just principal and interest is $1461, and you are considering renting it out at $1500 a month? This would be an epic money pit. Taxes alone put it in the red and that is before any maintenance, vacancy, management etc.
The money has been made in appreciation, absolutely no money to be made as a rental. If I'm missing any facts or maths please let me know!