First rental opportunity, or take the equity?

[John K.]

Good morning BiggerPockets nation! This is my first post but have been following the podcast a long time. 

I'm aware everyone's situations differ but have been evaluating all the options and still not sure so thought, "why not ask?". 

If there is a short version, here it is.

Basic info:

I have lived in my home in north Arkansas since 2008, it's a 3 bed /1 bath at around 1600 sq.ft. build in the 70s. If sold I expect to have gross around $35-40k in equity. Rent for a house this size in my market is probably between $650-800. Also to note, what I paid for my current home in 2008 is what most people are trying BUY run down rental properties for because investment properties are hot in my area.

Financing for the new house would be conventional loan with 5% min down. We've found a house at a good price that we like that fits our family.  It is older and needs updating but a pretty solid old house with a new roof, as a perk it is in an area that would be prime for a future rental property and in proximity of my current home (one block away).

There are tons of episodes and forum post on getting good renters and things of that nature that I have listened too and follow. This is a big first step and a huge decision, its crossed my mind that if I did rent and it doesn't work out I could still sell and get the equity out of the home but likely less after renters leave. 

What are some other deciding factors to consider to help navigate this decision? Financial or likewise.

Best regards and thanks!