House almost paid for-what to do

[Andrew Davis]

I have a Home I partially inherrited. The part we had to finance is less than a 100K. The main house is about 1800 sq. ft.. There is a second master added recently that could be easily rented. There is also a seperate 1 bedroom granny flat with its own driveway and yard. This entire property totals almost 0.5 acre. Roof is new, only 2 years old.

Home needs much TLC as my mom did not do anything for over a decade. Awesome potential as a rental. The garage could easily be converted to a studio as part of it is currently an office.

I dont care for the area. I would like to get a house elsewhere. But, I also know the potential this property has for generating income. 

The current value is 500-600k.

Should I just sell and purchase a nicer house in a more desirable area? I realyze that we will have to finance  the difference.

Should we take out a small loan for needed improvements. If we do this, is it still possible to purchase another home.

I know this sounds silly to you pros here but Im really in need of some sound opinions and advice.

Thanx