To sell or not to sell

[Kevin Cole]

First things first--this is my FIRST bigger pockets forum post ever! Apologies if it is long, but I have been going back and forth on this issue for a while and would like some input. 

Scenario: 
- I have a 2bd/2bath townhouse style condo in southern NH that used to be my primary residence. In July 2022 my wife and I bought a larger home to be our primary, and we have since rented out the condo. 
- Despite 3 tenants in under 3 years, it has done very well for us and has only been "vacant" for 15 days in that period, and has great cash flow, ~$1000/mo due to ~50% equity in the property, and a low covid-era interest rate. 
- I have been saving ALL of my cashflow into its own account to accumulate to buy the next rental (totaling ~$24,000). I believe something like a 2-4 unit small multifamily is likely my next strategy and I am exploring how to make that work.
- Due to my position on the board for the condo association, I am aware of long-term large projects that the association intends to embark on. We have a parking lot in need of paving, and the building will likely need to be re-sided. The association has investigated loan products for such work, but has not committed to anything. Some special assessments are already board-approved for 2025 and 2026 to help raise capital for such items, however I know when the time comes there will be a loan which likely demands a higher monthly payment for owners -- reducing my cashflow. 
- Based on sale of other units in the complex, I believe my current equity to be roughly $160,000, a little more than 50% equity. 
- The condo is currently leased through April 30, 2025. 
- August 2025 will be 3 years since I moved out. This is an important date for the 2-in-5 criteria for capital gains exemption. When I look at the equity and the 15% Capital gains tax bracket I would likely be in, I would avoid ~$24,000 in taxes if sold before Aug. 2025.
- I am aware of my 1031 options should I want to sell and defer taxes beyond that 3-year date (and would need to continue to do so until death if I wanted to avoid those taxes instead of just defer them). 
- I believe the current rental situation I have is better than the property warrants. I know the issues with the building, the quality of the condo, and the state of the association. These items have me slightly concerned and weighs on my decision, making me want to "take the money and run".

Question: Would you sell, abandoning a 3.125% interest rate, $1000/mo cashflow (which I believe would be roughly halved if a loan were taken for the capital improvements to the larger property), to lock in the equity gains tax-free made since 2020?
- Does this answer change/depend based on my current tenant's wishes? If they notify me they would like to leave does that encourage a sale?
- Regardless of sale now or a 1031 sale in future years, I would like to take the equity into new real estate opportunities.