Tenants want to buy my rental property in Philly - should I sell?

[Robert M.]

I own a one-bedroom condo in a desirable part of Philadelphia (Fairmount/Art Museum). I paid $265k for it in 2015 and am lucky enough to own it free and clear. I moved away from Philly last fall and listed it for $275k. There was a lot of interest but only a few bites; the feedback was that it was priced too high. I put it up for rent and thought I'll see what happens market-wise. For the last six months it's been leased to a young couple for $1,600/mo.

Last week I got a call from the tenants' agent saying they love the unit and want to make an offer for the previous asking price of $275k. From an investment standpoint, I'm wondering what makes more sense given the times we're in right now. This is what I'm weighing:

1) Just sell it. It feels like the market is as about high as it's going to get for a while, with COVID and all the fallout being talked about. I've had several people tell me to just sell it and hang on to the cash for now. Prices will fall probably sooner or later, and there could be opportunities to reinvest for more growth.

2) Keep it. My parents (who made have a stake in the property) feel strongly that I should hold on to it. They say that if we enter a deeper recession/depression, inflation will be a concern and that real estate is a good hedge against that. (I should note they have a few other rental properties, so there'd still be some buffer either way.) They also believe that selling the property because of COVID feels like a "panic move".

Finally, I'll just note that I don't have any plans to live in Philly again, so there's no personal motivation to keep the property.

Obviously a crystal ball would be great here, but short of that I'm wondering what other folks would do with this offer sitting in their lap. It's essentially a break-even situation, but I see it as a good chance to get out before prices start to slide. I'm also wondering if rental incomes could slip as the economy worsens. This is more out there, but I also think about behavioral factors like—as millennials age and have this recent memory of a pandemic that battered East Coast cities, will living smack dab in Philly be as desirable as, say, a suburban SFH? A repeat of the 60s-80s, in a way?

Looking forward hearing what others think about this!