We live in a shoebox of a condo in a vancouver suburb. Our place is worth 550K and the mortgage is 170K. We're looking into getting a new place, somewhere between 700K and 1M. House has always been principal residence, the cap gain would otherwise be about 100K.

I have 200 - 300K for the downpayment on a new property. If I sold my current place I'd have another 300K after closing costs. So we could buy the 1M place (if the moons align) with a 400K mortgage. Otherwise it would be more like a 700K mortgage.

The other idea was keep our existing place and rent it out. Market rent exceeds the costs of keeping the place. Market rent is 2.2K to 2.5K. Mortgage payments are 1.4K, strata fees 300, taxes 2K/yr. Concerned about the usual nonsense you get when you get a bad tenant especially when the NDP are talking about banning pet bans.

So the upside is a small additional income stream that covers the cost of owning the place, with much of the costs now writeoff-able and theoretically we'll earn some more capital gains, the downside is that I'd have to pay some taxes when I sell the place, the tenant could default on payments or trash the place, and I'd have to make bigger mortgage payments on the new place. What's better here?

British Columbia.