Retain SFH or sell and invest somewhere else for higher return

[Anshu Sanghi]

I own a SFH in Santa Clara CA in which I lived for quite a few years, before I moved to my current residence. When I moved out, I thought it would be good idea to retain the house as rental property and capture the long term appreciation. But now looking at numbers, it seems to me that it might not be best of the options, as it is currently providing cash on equity return of about 2.4% (long term appreciation not included). I am beginning to think that I might be better off selling and investing somewhere else. I would like to get your perspective on this.

The house at present is worth about $1M and I have about $700k of equity in it. Currently, after taking care of all expenses, it is providing about $1400 positive cashflow per month. This is about 2.4% return on my equity.

I recently invested in a duplex out of state and it is returning about 12% cash on cash.

I have been inclined to retain this house and hope that long term appreciation will make up for it (over a 10 year period). But let us say I would be satisfied with about 10% annual return after 10 years, the house will have to appreciate (keeping the calculation simple) by (10-2.4)*10 = 76%.

While I am very positive about appreciation of RE in silicon valley (specially SFHs), but 76% appreciation seems unlikely to me. I would like to get more perspectives and advise on this.

Thanks