Landlord/Rent or Buy 2nd Home

[James Channing]

Just want to see what others would do in my situation. I own a Bay Area condo which is worth ~$700k now with a mortgage of $230k. Rent on it is about $2900. Mortgage + property tax + HOA is ~$1900 per month so cash flow is definitely positive if I rent it out. Mortgage is at 3.375% 30-year-fixed so cash-out re-fi before renting it out might not be sensible.

My family now needs more space and am considering buying a SFH in the ~$1.5m range. I also have ~$700k cash in hand. Obviously I prefer not to use all $700k on a 2nd house, if I don't have to, as it will be a good base for other investments or kids' 529 savings.

For a $1.5m home, property tax is already $1500 per month, and ~$2k in mortgage interest after 2018 tax laws' deduction - I will be taking the $24k MFJ standard deduction if I don't buy a 2nd home.  $1.5k + $2k = $3.5k running cost.  I follow the zillow rental listings for those houses, and they can be rented for $3.5-$4.0k

Endless numbers crunching and countless spread sheets tell me land-lording my condo, and renting a SFH is not such a bad idea. However, this is not a normal action within my circle of friends and it is hard for me to find someone to discuss on my plan.

What do you guys think? Is it a feasible strategy to land-lord my condo and rent a SFH? Or should I bite the bullet and look to purchase the SFH?