Should I sell my home or keep it as a rental?

[Greg Hammond]

Background: Bought 3 bed 2 bath 1900 sq ft primary residence home outside of Sacramento in 2019 for $540K. I used the VA mortgage loan with 0% down (no PMI) and currently have a 30 year mortgage rate at 2.25%. I will be leaving active duty military, and will be moving back to Upstate New York in June 2023. Home currently worth $750K. The Rocklin/Roseville area is a very desirable place to live with top public schools.

Situation: If we choose to keep as a rental property, we would use a property manager (10% fee of rent) and California charges out of state investors an additional 7% fee of rent.  If I rented this property at $3200 a month, my monthly expenses would be approximately $3700 a month (mortgage, maintenance, taxes, insurance, property management).  I have not calculated potential annual repair costs (bought as new build in 2019).  

Question: Should I sell my home or should I turn it into a rental property given the monthly negative cash flow of -$500?  I would be able to afford to pay the excess expenses of the negative cash flow as well as any unexpected annual repair cost.  However, I do not know if it is worth it.  I do not have much experience when it comes analyzing these type of decisions, and appreciate everyone's advice.

Thank you for listening,

Greg