Rent vs Sell: Short term relocation

[ck25]

Thanks in advance for any help. My spouse and I are relocating from Austin to San Jose, CA. We bought our home in Austin a little over two years ago, and we have no plans to buy a home in San Jose. Although renting our home would clearly be cashflow negative, we are thinking we might eventually move back to Austin and are nervous to give up our very low interest rate.

Market Value: $394k
Original Purchase price: $350k
Original Mortgage Amount: $275.5k
Interest Rate: 3%
Mortgage Term: 15 years
Term remaining: 13 years
Amount remaining on mortgage: $245k
Gross Rents: $2450 monthly
Principal and Interest: $1928 monthly
Taxes and Insurance: $750 monthly
HOA costs: $127 monthly
Deferred maintenance notes: new construction (built 2015), so hopefully not too much in maintenance in the next few years

If it matters, our home equity is about 14% of our current net worth. Even with the negative cashflow on the home, we could afford to max out all tax advantaged accounts and put a good amount in after tax accounts. Our fear would be job loss coinciding with a drop in the housing market - what would you do in this situation?

[leland]

Not to be too simplistic about this, but how much do you like the place in Austin?

If you love it then maybe it's worth the cost to bet on the appreciation and safe right of return. The rental will still be in good shape after a few years.

But if it was just ok and you have a long horizon in San Jose then I'd sell after you're set on staying in CA. Especially if you'd plan on renting it out for a decade+ - you'd probably need to do a decent reno job to want to move back in after that.

[Mother Fussbudget]

You're moving from the 6th highest appreciating RE market to #1 (per this article).

The questions to ask:  Do you want your ~$150K of home equity growing in:
 * Austin @~3.3%/year?, or
 * San Jose @~8.9% (where $150K isn't even a down-payment), OR...
 * somewhere else (REIT's, housing in other markets where the rent's actually pay the mortgage, etc)?