We have eight years left on our mortgage and a remaining debt of $127,000. The house is worth about $260,000. Now we’re going to move into my father-in-law’s $700,000 home. We’ll only have to pay his property tax, about $8,000 a year. Should we sell our house and invest the profit? Or should we rent it for eight years and then decide whether to sell?

There are financial and nonfinancial issues. First, the financial:

My guess is your principal and interest payments are about $1,800 a month – $21,000 a year. And real estate taxes and homeowner’s insurance probably bring the yearly cost to about $25,000.

So if you sell your house, you’d save about $17,000 a year, plus the cost of maintenance, repairs and other typical homeowner expenses.

Moreover, the $133,000 you’d have after paying off the mortgage would be tax-free, even though some of that would be profit – the difference between your sales price and what you originally paid. That’s because a married couple filing joint federal tax returns pays no tax on the first $500,000 in profit on the sale of a principal residence.

Keep the home and rent it out and it would become a business property, and you’d owe capital gains tax whenever you do sell. That’s a maximum of 15 percent on any profit.

To keep it simple, look at it like this: By selling, you can get $133,000 now, tax-free. Turn the house into a rental and some or all of that same $133,000 would be taxable, probably at a 15 percent rate.

On the other hand, you might rent the house for a profit, and the property may grow in value over the years. As a landlord, lots of your expenses would be tax deductible, including mortgage interest and real estate tax.

Now to the nonfinancial issues.

First, if living with your father-in-law doesn’t work out, would you want to move back to your old house or find a different place?

It might make sense to keep the house until you’re sure the move was a good idea. You could still get the tax exemption on profits when you sell so long as you’d owned and occupied for two of the previous five years, even if you rented it out for the other three.

The other big nonfinancial issue: Do you want to be a landlord? How would you feel about racing over on weekends to do repairs?

No one can tell you for sure which investments – real estate, stocks bonds, and so on – will pay off best in the future. But you can be pretty sure that becoming a landlord would involve more headaches than not becoming one.

Jeff Brown is a business columnist for The Philadelphia Inquirer.