Keep or sell condo? How do I get my next home?

[Jason Chan]

Hello all, first post here. Looking for advice with future home plans. I have a condo on the Eastside of Seattle that I've owned for several years now. I'm looking to move into a single family home, also on the Eastside of Seattle, which as some may know, is a very competitive area (HCOL). I recently started learning more about real estate and am interested in keeping my condo as a rental in the future. However, I do not have a good idea as to how one would analyze the numbers in order to find out if it's a worthwhile endeavor. I've heard some investors use CAP rate to analyze/compare whether or not a potential property is worthy. Is that what should be used here?

Also in need of consideration, in order to get a decent down payment on the future home, I'd need to either sell the place, or at least get a cashout refi from it to get some of the equity out. If one were using the CAP rate calculation, how do you include the following? Do you include the future refi mortgage cost into expenses? How do you include possible one time costs to fixup the place for renting? Is there a way to budget safely for potential special assessments?

I also know a lot of people "trade up" from one house to the next as they sell it to put towards the down payment for their next home. How do you decide if this is the right choice? 

Sorry for all the questions, as I said, I'm new to all of this and trying to learn. Thank you for reading through my post!