Renting out my house doesn't meet the 1% rule...sale?

[Randy Gaona]

First time Posting

So I originally bought my first house for $409,000 using my VA loan on Oahu. Took out a 30yr fixed 3.25% rate and have lived in the house 3 out of the last 5 years. I stayed in the house for 3 years and my wife and I decided to move out and rent it out. The house has been rented out since July 2015 but my rent is $2650 - HOA($408) - Property manager(10%) etc. Would like some advice on if If i should continue to rent this property out or put it on the market for sale? I continue to pay out of pocket a little each month for this property. My ultimate goal is cash flow which i'm not currently getting. It also doesn't even come close to the 1% rule i've read about and would be forever in a day before I get to that point it feels like. I know the housing market in Hawaii is good right now and a lot of houses are going for over asking price but I believe with the money I could get out of selling the property i could buy a nice house in Texas where i'm originally from. I would like to hear your thoughts good or bad, Thank you. Property address is 91-1155 Kakala st. #208 Kapolei hi. 96707.

[Randy Gaona]

First I would like to thank all of your inputs. I've been lucky enough to be in hawaii for almost 10 years now and add another 3 years as i just got orders again to stay. My wife and I just bought another house in 2015 in the Kahiwelo development in kapolei and we used her VA loan to pay for that one, and i paid for fees etc out of pocket so it wasn't in the loan. That house cost 719K 30 year fixed rate at 3.6%. So we've both used our VA loan each and don't want to use it again as the percentage goes up for the VA funding fee unless of course you can put more money down to lower it. One of the main reasons I was looking at selling is i noticed that a lot of houses for rent in the neighborhood were around 2300 a month and I charge 2650 a month(I allow pets). With my wife and I having a baby on the way I don't want to have to pay out of pocket. I would like to avoid paying for capital gains tax also if i can. I do not plan on moving back into that house as we now live in a single family home. I do however want to continue to live in Hawaii as long as I can as I been here a total of 10 years. I would eventually like try to be an investor but I have a long ways to go. So for now I figure my money would go a lot further investing in a house in Texas, rather than Hawaii.