Is it better to sell or hold a house?

Would welcome feedback on my following situation:

Have a 3 bedroom house in Canberra. Current loan balance is $205K. Bought it for $290K three and half years ago. Lets assume I could sell this for $400K.

I plan to leave Canberra in about 2 years time, so would have to rent until then. Canberra not cheap for rent, say $350-400 per fortnight. I would invest the 'profit' from the sale ($195K) into investments (maybe with margin loan as well). I realise there are different costs that will reduce the $195K amount, but just keeping to whole number for now.

My question is: "Is it always going to be better to hold the house, keep paying down the mortgage for the 2 years and then sell? When do you take the win, take the profit on a house and walk away happy?"

I will assume there are several important factors I haven't listed above, but I guess I am just after general feedback on the approach.

Cheers

 

Isnt canberra hot at the moment....

Why would you sell out of a house and put the funds into the market? Do you think over a 2 year frame you can make a better return in the share market (or other investments) than you can in the canberra housing market. If so why not get a LOC on the property and invest that in to the share market?

When you leave to you consider keeping the place as an IP? If so why, If not why...

 

Canberra is definitely hot at the moment, in terms of temperature, rents and house prices. The scenario I described is more a 'musing' on behalf, and this forum is a great way to get objective feedback on such thoughts. I kinda assume that holding the house is the better option, but like to look at things from different angles.

I actually have a LOC with Margin Loan (CALIA+) with the property presently. Bank valued the property at $355K, lent me $284K (80%), $205K on home loan and rest invested with matching ML. Have only just set all this up with assistance from a Financial Planner. So in reality, I will maintain this course, however, if someone is silly enough to pay 'over the odds' on my property, would I consider selling anyway and taking the apparent profit while its there. How to figure out what this amount would be - what would be a win? my first estimate was $400K.

I have also been contemplating the options for the Canberra property when leaving. Lots of questions around that. Do you aim for positive cash flow from rent (to cover loan, or just interest), where does it break even? I am busy reading the Rental Reality posts and the Living on Equity posts at the moment, but will need to go through a few more times I think. At this stage, I think the type of property I own lends itself more to a sale than a rental.