Pretty easy question to answer if you know what your goal is. If you wish to add the home as an asset to your portfolio for a long term holding AND the numbers look okay for the home as a rental, then hold onto it. Having a nice mix of 401k with equities and/or bonds and stuff like that along with some real estate is not a bad way to go.

As Econprof noted be realistic about the cash flow when calculating your returns. Find comparable rentals and see what people are asking for them. Pretend you are a tenant and go visit them and see if the landlord will lower the rent so you can worst case your monthly rent. Factor in a little vacancy and maintanence but don’t kill yourself.

Understand your conversion to a rental will also help your taxes significantly between depreciation and being able to expense other line items such as insurance and other expenses you would incur but not be able to deduct as a homeowner. Also this is not an immediate make/break case. You can convert it to a rental and you still have two years of non owner occupancy to sell it if being a landlord is not for you.

I would not worry to much about the overall market. Ignore statements that compare your locale and crappy small condos that are primarly investor owned as those markets are orthogonal. Agreed with other advice about no huge downturn but my caviot would be IF interest rates stay in a limited range. Yes we had a huge runup the past 2 years. That will not continue. We will even out and normalize so you will see some up/down activity in a limited range… Honestly though I would try to keep it as long as the cash flow was not horrible. If you can maybe refi to a lower rate while it is still owner occupied if your rates suck compared to prevailing rates.