Advice with sell vs rent in Cambridge, MA

[Konstantin Klitenik]

I'm moving to a bigger place and wanted advice on what to do with my current condo.  Here are the details:

Location: Cambridge, MA USA

Purchase price:       $310,000 (2009)

Mortgage Balance: $185,000

Monthly Payment: $1,533 (includes mortgage, insurance, property tax)

Rental potential: $2,350/mo

Sell potential: $490,000

The way I see it, I have an opportunity cost of $490k-$185k less 6% commission = $275k.

My rental would net $9,800/yr less any vacancies and improvements, so that's $8k/yr.

To me that appears to be a 3% return.  Not to mention that if I keep this for at least two years, I'll have to pay capital gains on the sale when I do decide to sell.  Now, the property may appreciate over the next several years but it would need to clear the 20% cap gains tax to make a dent.

Am I missing anything in this calculation?  Would you recommend to sell or rent?

Thanks!