Important decision: Rental real estate vs stocks

[Marek Kucharski]

My wife and I have three houses that we rent out. This journey started about 10 years ago. We have 15-year mortgages on these. The houses are worth about $800K (TX). We are very happy with how these houses appreciated; we put very little money down and were rewarded handsomely. Of course, this was no bed of roses: we put a lot of work into these - roof leaks, flooded floors, painting, clogged toilets, annoying tenants - you name it.

Today, we are contemplating selling one house and putting the profits into SP500. What makes us contemplate this is some back testing. For example:
- The first house was purchased in 2013 for $145K. That house is now worth $280K.
- If I was to invest $145K in SP500 in 2013, I would have about $500K

I know that the past is not the prologue, but I also know that historically housing trails the SP500. That said, in 2013, we were fresh out of grad school and did not have $145K to invest in the market. So, buying a house with 5% down was the only option. Today, we could sell one house or more and invest a larger sum for the long haul.

We have tenants moving out in the spring and we are considering selling. The house in question happens to be a house we lived in recently and we could sell it and not pay taxes on the sale. Do you think we should pull the trigger and put the money into the market? Thank you for your advice.

Relevant details: 

- Household income about $250K, which means that we cannot deduct rental losses

- All houses have 15-year mortgages , which means that they do not cash flow well. We are either in the red or breaking even depending on luck in a given your. Tenants are paying off our mortgage. 

- We could also sell, invest the money, and buy another rental (re-leverage)