Should I sell or hold my Bay Area townhome?

[Navjeet Singh]

Hi

I have a townhome in bay area with 70% equity currently valued at 1million.

I am considering relocating to Sacramento area to expand my family. I have enough savings to buy another property in Sac without selling the townhome.

I need advice on what should I do with my townhome - sell it and invest in another property/ market or hold and take tax depreciation - how does depreciation recapture work when I eventually sell it?

What would be ideal to minimize taxes? 

Note:
- it can rent for about $3500/month and leave me with $400-500 cash flow/month.

thanks!