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Should I sell one property to pay off another?

I got into REI a few years ago, and bought a class C duplex cash for about $40k, generating $1000/mo in gross rents (good ROI, but the area is kind of sketchy). My realtor thinks now it's worth around $70k, and that's because our market is currently experiencing a pretty substantial inventory shortage.

The tenants in both units are great people and we get along well. They generally pay on time, and take reasonable care of the property. But, being a class C, there are definitely some issues with property maintenance and on time payments, but none that are extreme at all.

We moved about a year ago and kept our (previous) primary residence and turned it into a rental as well. We owe about $85k on that property. It currently generates gross rents of $1500, with a mortgage of about $850.

The thought is, should we sell the class C duplex to pay off the other property? It will net a little less cash at the end of every month, but we would own it outright (we would either add some savings, or simply own it outright in a year or two).

The upsides to this as I see it are:

  • Fewer tenants to manage
  • Easier to access the equity for future purchases (hard to get money out of a duplex that cheap, with LTV of 75% doesn't leave much)
  • Previous home has much higher potential to appreciate VS duplex

The downsides I see are:

  • Less diversification/more risk due to vacancy
  • Would still have to add some out of pocket to pay off
  • Would not make up the full value difference.

What are your thoughts on the matter?

submitted by /u/Synth3t1c
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source https://www.reddit.com/r/RealEstate/comments/hhap2b/should_i_sell_one_property_to_pay_off_another/
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