Sell mortgage-free duplex to invest in better neighborhood?

[Katie Robillard]

Hi everyone.  I've been back and forth on this topic depending on the day and I would love to hear what others think.  I currently have a mortgage free duplex in Lowell, MA in what I would describe as a B-/C neighborhood.  Most people on the street have lived there for years, with the exception of a few rentals that turnover fairly often.  The biggest challenge / drawback of the location is parking.  We do have 1 spot in front of the house, but there are regularly issues with others pushing into the spot.  Plus, 1 spot is not really enough for a 3/1; 2/1 duplex.  Currently both units are rented.  The 3 bedroom is well under market value - due to parking and the fact that the back porch needs a little work.  The one bedroom is currently section 8, but we'll be looking for a new tenant soon as the current tenant will be entering a nursing home.  Currently the property cash flows well and it has appreciated as one would expect with the rest of the area.  However, the house is in need of additional updating and renovations, so I'm wondering if we should put the money in to this house or sell it and purchase 2-3 properties in better neighborhoods.  My thought is that no matter how nice we make this house, we likely will not get a top-tier tenant, but if we purchased a few houses in a  nicer neighborhood, we would have the potential of attracting better tenants.  Of course I'd have to analyze specific properties to determine if this would make sense, but I just don't know if I'm crazy to consider selling a payed-off, cash flowing house to take on 2-3 mortgages (and reduced cash flow).  Just for perspective, REDFIN currently has my duplex values at $349,000, but $320,000 - $330,00 might be more realistic.  Thank you in advance for your input!