What to do with a rental property refi & does HELOC make sense?

[Tayler Franklin]

I need some investment property advice. I can refinance my first-and-only current rental property to lower my overall payment by a couple hundred per month and get rid of PMI, but I'm not sure what to do after that. I am tempted to put that extra $200 back in directly toward the principal for the time being(I don't really want to extend my loan and slow how quickly I am paying it off). Does that seem like a good strategy? (for the record, the property is cash flow positive about $100 per month as is and is only a 5 year old home, but my emergency fund is only about $10k right now)
And does it make sense to ever use a line of credit? I have about $60k in equity right now, and my simple plan was to just steadily pay this property down before selling it using a 1031 exchange to move into a bigger property in a dozen years or so(I'm not trying to build an empire, just pretty casually live-in renting/house hacking my way to retirement and don't think I would ever want more than 3 properties). But I may be able to purchase another property to live-in and rent with the $60k as a pretty reasonable downpayment, which could accelerate my retirement plans. I'm just not sure if it is worth it to lose that equity in this property to do that. 
Thanks for any insight. I'm pretty new here and a bit overwhelmed. 

Basic details of the refinance I'm being offered:
Interest: 4.5% up from 3.25%
PMI: $0 down from $281
Total Loan Value: $240,000
Monthly payment including tax and insurance: $1,524 down from $1769
I didn't catch the closing cost total, so I'll need to follow up on that. If anyone has any idea what I should expect to pay out of pocket if I do this refinance, let me know. Thanks!