You have to factor in demand and vacancy rates to determine if it will be more profitable, and that’s specific for each market.

You will also have to factor in the closing cost for the new loan.

Heck, some people might even pay more for the 'cool factor' of living in a 'small home'....I'd give it a go since you're a veteran of this RE stuff.

A realtor who understands the numbers can help analyze the property’s projected cash flow and ROI, plus they might know local leads from probate attorneys or even “drive for dollars” efforts that can reveal off market gems.

I was able to drive the value through my effort and sell for a profit.

I think another factor here in determining whether its a good investment is your age and your goals. 

Report it to the credit bureau as a loss - and they won't be driving a new car, getting a new phone, renting/buying home until they settle with you. 

If rents don’t keep up, your income won’t sustain rising costs.What Drives Rent Growth?

There are two main factors that you can use to track gentrification, so why can't they be used to track the reverse?

Appreciation will drive your returns, not cash flow.