Investment strategy in low cap rate location

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Hi,

I have been reading the blog and listening to the podcasts for a while, and now I’m trying to narrow down my focus and figure out the right investment strategy. It would be really helpful to get some input from more experienced investors.

At the end of the year, I will complete the mortgage payments of a property that is worth $600,000. I’m already renting it out and it’s only netting approximately $15,000 per year after expenses and taxes, so it’s not the most compelling return and there isn’t really room to increase rent.

I'm considering selling the property to pursue investment opportunities that can generate at least 5% of capital per year. I can probably refinance my mortgage for up to $300,000. However, that amount wouldn't buy me anything in Los Angeles that is where I live and where I would like to invest. So these are the options I can think of for now:

1. Sell the property and buy one with better NOI (or one that requires some work that would lead to a better NOI)
2. Re-finance my mortgage and buy a $300,000 house in a cheaper area outside Los Angeles (perhaps outside California) with all the downsides of distance when it comes to searching and then managing the property
3. Enjoy the higher monthly cash flows of the existing propriety after the mortgage is paid off, save the money and wait until I have enough to buy a property in Los Angeles

I'm sure this might come down to personal preferences and risk tolerance, but I would really appreciate having some direction on how to make a decision in this situation. It would be great to get any advice in case I'm missing any other options or important details.

Thanks!