Keep or sell my condo?

[Ben Lee]

Hi BP community!

I live in a condo located in Walnut Creek that I plan to rent out in the future. I purchased it for approximately $500k, and it is now valued at $635k. My mortgage interest rate is 3%. However, the HOA fees are significantly affecting my cash flow by $600 per month should I rent it out. It's also located in a very good area where I think the property value will continue to increase in the next 7 years.

I'm interested in purchasing a single-family home (SFH) with an accessory dwelling unit (ADU) in concord, CA of approximately $800K-$900k. Concord doesn't have good school districts as compared to Walnut Creek though. My plan is to live in the main house while renting out the ADU and the condo. However, I'm concerned about the financial viability since I would be responsible for two mortgages. The net cash flow would be $600 for the condo and $3000 for the SFH approximately.

Given this situation, I'm contemplating whether it would be wiser to sell my condo and purchase an SFH with an ADU, especially considering that SFHs generally appreciate faster than condos. My current mortgage interest rate is 3%, but the new interest rate would be 7%. Equally, I'm thinking it's a smarter choice to stay in the condo due to lower interest instead.

Given these factors, do you have any recommendations or suggestions on what I should do or anyone in this dilemma? I’m curious to hear your thoughts. Thank you in advance!