Hold or Sell? I Need Help! Here's the breakdown.

[Robert Walmsley]

I have a SFH built in 1998, 4 bed, 2 bath, 3 car garage, single story in excellent condition in Antelope, CA. I owe $140K (Originally paid $175K in 2011) the ballpark market value right now is $420K ($280K spread). My PITI payment is $1,104 and I have it rented for $1595 however my tenants are getting ready to vacate. I can re-rent for $2000/Mo. and capture roughly $900/Mo. or sell.

My loan is 30 year fixed at 3.6%, I am a RE Broker so I can minimize costs on the sell, probably net around $265K. It has been a rental for a few years so I will have to pay cap gains or roughly $50K netting out at around $215K.

What should I do?

Capture roughly $900 per month on the rent or walk with the $215K? 1031 exchange is an option but I don't think I want to re-invest in todays market in my area. I am not excited about land-lording across the nation either. What would you do? Looking for some guidance. Thanks! 

[Dave Foster]

@Robert Walmsley, with depreciation you're probably looking at a gain of more than $300K which in CA is gonna net you a tax bill of maybe $90K!  That's a big chunk of profit to justify selling and walking.  So if there's nothing else in your area you like . and there's nothing out of area you are comfortable then the 1031 option really becomes between some passive instrument and what you've got.  And the returns are going to be better.  I'd probably just sit tight.  There's many a landlord in CA generating less rent/asset value than yours would with the adjusted rent.