I'll Be Calling Tomorrow Art
...and as far as selling vs. renting, this is how I see the wonderful world of real estate:
Scenario #1) You buy a house and owe 80% to the bank. 2 years or more later (to enjoy tax benefits) you decide to sell. The property has increased in value anywhere from 2-5% a month over that period of time, and you end up paying off the mortgage and still have some nice cash in pocket that you didn't have before. Final result: You lived in a house for a number of years, paid the mortgage, and ended up ahead in the end in no worse a position as you were before, and some nice cash to help fund whatever venture you are undertaking currently, ie school.
Scenario #2) You buy a house and owe 80% to the bank. You decide to keep the property, and keep paying your mortgage and rent it out. The rent covers the mortgage, as well as property taxes and insurance, as well as any necessary renovations, and leaves SOME money in your pocket to assist with personal living expenses. No chunk of money to help with anything really, just a guaranteed investment that can always be sold at a later date, see Scenario #1. You can also always pull money out through refinancing every few years at the cost of losing equity in the final sale, but you never really know how the interest rates are going to change in our sweet strong-ass dollar economy...
Where does this leave the lucky homeowner? Wherever is relevant to their situation at the time! Sure, if you hold on to the property and dont sell for another 20 years there will be a tremendous amount of cash generated on the sale, but could you have used the cash of an immediate sale to finance a different life goal? If you sell now to get the cash out, will you be bummed at the lost potential value of the house if you kept it for years and years?
IMHO, and from my most recent of personal experiences, sell the house now, take the cash, lose more than you are comfortable with to the government in taxes, and use the money to do what you want with your life. When you are wildly successful, or even marginally successful, buy another house to sit on for years, let your kids reap the benefits of the future sale of that house.
Leslie and I sold our house in Hermosa for market value, bought in Manhattan, increased our mortgage, and are using the money to fund our current "business" venture. Sure, if we rented the house, we could be making enough to live on close to comfortably, but we would not have the cash on hand to do with what we want, and live like we want right now. Our decision was the right one for us right now.
Most people will tell you to keep the house, and maybe most people are right, but it sounds like you guys would be happier if you had a fat bank account without the worries of an out of state rental, rather than a slim account with the pain of dealing with renters, etc.