Should I sell or hold?

[Kevin Autran]

I'm at a bit of a crossroads, and figured I'd ask for some advice/feedback... 

I've got 2 x single family rentals in Jacksonville, FL, and I'm trying to decide if I should sell one of them and reinvest in a cheaper cash-flow oriented market or continue to hold. I currently live in Annapolis, MD, and have considered house hacking but the price to rent ratio here for long term rentals just doesn't seem to work. There is also some local legislation in place that places restrictions on STRs for non-local area residents (I'm expecting to move in 2 years due to the military). For that reason, buying locally here and living in the property  to house hack when I know I'll be moving in a couple years doesn't seem like the best path. My liquidity isn't great right now either, so that is why I'm considering selling.

The property in Jacksonville, FL: 3 bed/2.5 bath townhome in a community with a relaxed and cheap HOA (45$ a month, but no leases shorter than 6 months aka no STR). I brought it in Sept 2019 with a VA loan for 335,000 and it has appreciated roughly 100k to around 435,000. I lived there for 2 out of the last 5 years so I could sell without any capital gains tax. There is a tenant in the property at $2300 a month and the lease ends in December 2023.

Pros of the property:

- Great zip code, 32224, near the beach with a lot of demand

- Jacksonville/Jax Beach has seen a lot of population growth

- Great schools, low crime

- 2.375% Fixed 30 Year interest rate

- Good shape from a maintenance perspective

Cons of the property:

- Net negative true cash flow. Currently renting for $2300, but my expenses for property management (12%, pretty high) and PITI comes out to around $2200. This leaves $100 for vacancy, capex, and maintenance, which is no where near enough to cover all those. So really probably losing a couple hundred a month over the long term. I believe there may be some room to raise rents with the next lease, however, to closer to $2400.

- Flood zone, but no history of flooding since the property was built in 1996. But again, higher expenses for flood insurance costs, etc

- ROE is nonexistent. There is roughly $315k left on the loan bringing the LTV to around %73, so there really isn't much room to take money out via a HELOC to invest any way

- Can't STR due to HOA (no leases < 6 months)

Am I getting impatient, or should I attempt to exit and take home around $75,000 without capital gains tax (living in property for 2 out of the last 5 years and then listing as a rental)? Ideally I would like to reinvest the property in a cheaper cash flow market (possibly in the Midwest, ie. Cleveland etc.).

Thank you for your time and feedback!