Moving - do we rent or sell and invest outside CA

[Keith Gilbert]

We are moving from Long Beach, CA to Chandler, AZ.  We are trying to decide what to do with our current house.  

I asked a friend and he posed an interesting question.  Imagine you had $350k (which is the cash our equity in our home) would you use that money to invest in a single family home in Long Beach?  Our plan was to rent it out, but we have the house on a 3% 15-year note and it would only break even or be a slightly negative cash flow (not counting debt reduction or appreciation).  I don’t see our house appreciating much more given it’s one of the nicer houses in a very blue collar neighborhood.

Should we hold onto it?  I’ve always believed in never selling.  If we do sell it, how would you recommend investing the $350k.  We don’t need the money for our AZ house.  However if we did put it into our AZ house we would have an extra $4k per month to invest.