Should I sell or keep this rental property?

[Mariela N-Tyler]

Hello BP's Community, 

My husband and I have heard for sometime now that the housing market is going to crash in 2016. After listening today to Arthur Garcia's BP podcast #6, we are thinking about selling our primary home (located in Livonia Michigan) The reason being is that we have a rental property that we acquired as a primary residence in 2001. We bought it for 130,000, but when the market crashed in 2008 we went underwater. Right now the property is valued at $100,000 and we owe $110,000 on it. We also have a home equity tied up to it for 14,000. We have a loan with a variable interest rate. The rate right now is 3.125% and it seems to be increasing every 3 months slowly but surely. The maximum amount the interest rate can reach is 11%! I talked to our bank and they told us we cannot refinance since we have to pay the home equity first before we can do so. We are currently renting it out for $1,150 per month and our property taxes just went up this year due to a homestead denial. This left our escrow account negative and as a result our mortgage payment went up from $924 per month to $1,158 per month. The mortgage plus home equity together amount to $1283 So our cash flow this year became negative for $133. We were thinking about paying off the home equity but it is going to take some time. Also, we just increased our rent from $1,050 to $1,150 so we cannot increase it again until June next year.

Should we sell this property? The houses in the area I don't think will go up in price anytime soon. 

Any advice would be greatly appreciated. Thanks!