Orange County Ladera Ranch Property

[Daniel Choi]

Hey all! New to BP. Would love all of your thoughts. Please be brutally honest! I own a townhome in Ladera Ranch, CA. Its a really nice neighborhood. Bought in 2019 pretty high. We recently moved to KY. This townhouse was our residence. We are now renting it out. 

Pros of the property:

1) really nice townhouse, end unit, young families love to live in this area. I don't really seem demand going down. Super safe. Lots of parks. Very unique. 

2) Has appreciated 40K this past year (but I'm not sure its going to get any higher). Now worth 580K

3) I have a good PM, so I don't think too much about the property

4) well built house that doesn't have many problems

Cons:

1) negative cash flow 150-250/month (though I would be pretty fine taking the hit at this point in time)

2) not sure if the area is going to appreciate any more

Our options seem to be:

1. Sell the house, do a 1031 and buy in Louisville (maybe a 4 plex?) that can cash flow

2. Sell the house (and break even) and wait for the market to cool before buying again

3. Accept the negative cash flow and raise the rent every year. 

Main questions: How does one know if an area will appreciate any more? (My friend's parents have a townhome in SF Bay area that appreciated 300%) and what should I do? Thanks ya'll!