Sell our house or keep and rent it out?

Sell it. The protection laws for tenants in Oakland are very very strong. My husband gets calls all day long from landlords who might lose their houses due to tenants not paying. And with the eviction moratorium in place with no end in sight, I can’t imagine wanting to be a landlord right now. 

We just went through the same situation and decided to keep our other house. Rather than renting it out long term, however, we are more focusing on renters looking for a „sabbatical home“. That way it’s clear, that the lease just goes for 1 year Max. 

Unless you are very committed to holding the house long term and are willing to be very involved in managing it, I would sell and invest the proceeds elsewhere. I've had two residential rental properties over the past 16 years, and I have since sold both of them. People who regret selling rather than keeping probably have rose tinted glasses on. They have an idealized vision of kicking back, collecting rents, and watching their property appreciate. They do not realize the hard work and money that goes in to maintaining a property year after year. Having a negative cash flow is another reason to consider selling. Do the math and talk to an accountant before deciding anything. Tenants have a lot of rights these days, and getting rid of a tenant (for example if you want to sell later) is almost impossible. Beware of who you rent to if you decide to keep it. I'm not supposed to say this, because it is discriminatory, but I would avoid tenants with minor children if the house is older and has lead paint. They could make you remediate and replace doors, windows, soil, etc. - very costly. I know because this happened to me. Also, if you rent to someone, they could later have a roommate move in who is psychopathic. Again, I speak from experience. The ideal tenant is a visiting professor on sabbatical, who has a finite time frame for living there. Also, if you decide to rent it, I would get a real estate attorney to write up an ironclad lease. Don't forget all the required disclosures, such as the lead paint one. 

Only you know the exact scale of money we're talking about, but if the rent wouldn't cover your holding costs, you'd have to have a pretty generous cash flow to not feel that pain. I think most people would cut it loose for that reason. Additionally, managing a rental house can be a pretty aggravating part time job, that in this case, YOU would be paying for. One final consideration is number of kids you have. If two, maybe you want to keep it for that reason alone - you'll have homes for both your kids in case they want to live in the Bay Area when they grow up. No guarantees of that, though, and if the houses are much different in terms of their size and amenities, maybe that creates sibling strife down the road. So, all things considered, unless you're sufficiently wealthy to absorb significant holding costs, I'd sell it.

I'm also curious about the responses....It is tempting to think the Real Estate market will keep increasing compare to the stock market, but right now you have gold in your hands if you sell your house. I think you need to do your homework and figure out your net gain if you sell now and invest in stock market vs  appreciation keeping it rented it and sell it in say 10 years.... but remember there are expenses involved if you keep it: business tax with the city of Oakland, any new tax assessments , loosing tenants and having the risk of it to be vacant for a while, maintenance, even more if the tenants don't take care of it, etc etc....It is never easy to be a landlord.. and yes, all the new ordinances and regulations regarding rent control in Oakland.

difficult decision, ver personal, probably you already made a profit from it.

Good luck!!

We became an accidental landlord several years ago. My partner and I each owned places prior to getting together and kept them as rentals when we purchased a home together. Our experiences with the two properties have been quite different.

One property is about a hundred years old and large. Most of the tenants have been couples with young children due to the size and location of the property. We replaced the roof and painted the exterior recently. This cost about $45k. I'd say I'm there every couple of months or more, to deal with various issues such as leaks, plugged toilets, broken appliances, etc... After trying to find tenants on my own, I gave up and hired a broker who charges me about a month's rent. They have found tenants who have good credit but are generally less flexible and more demanding. The tenants have generally been harder on the property.

The other property is around twenty years old and a one bedroom, most of the tenants have been couples or singles. The building's HOA takes care of all the exterior maintenance issues. I'm rarely there. I've been able to find new tenants on my own fairly easily and they have all been really easy and flexible, knock on wood. The wear and tear on the property has so far been light.

Based on my experience, I'd ask you how much maintenance your home will require and how much bandwidth will you have to deal with those issues on top of your own. Some of it has to do with the age and condition of the home but also how hard the tenants are on your property.

One other factor to consider is that you will get a break on your taxes for any gain up to $500k (250k if single) if you sell your home if it was your primary residence for at least 2 years in the past 5.