Welcome to BP Chris! I've been a long time lurker here but from what I've seen, OOS is where it's at. Investing locally in the Bay is speculation in terms of hoping the market will continue to appreciate. By going into negative cashflow in local properties, how long can you lose money before giving up?
That was one of the lessons from one of Robert Kiyosaki's books as he was about to lose money on a negative cashflowing condo. It was his rich dad who asked him how many years of negative cashflow he can sustain.
Also, if you're renting out the unit, you can only take advantage of the 1031 tax benefit in upgrading to a larger property without paying tax on your sold property. However, if you were to sell the property, you could keep 250k tax free if single or 500k tax free if married ONLY if you've lived in said property for 2 out of the last 5 years. But by living in there, you'd be further negative in terms of cashflow. But I'm not an accountant so it's best to consult a tax professional.
@Ced Chan that’s really helpful information! Thanks man.