Analysis paralysis? Help analyze this deal

[Account Closed]

Long time reader first time poster. Amazing community!

I think I've hit analysis paralysis stage with 1 property in my rental portfolio and would appreciate some financial advice, specifically - based on the numbers, does it make sense to hold long term, or 1031 into something better? 

Some info that perhaps will help with your answer:

- The duplex is paid off, purchased 2 years ago with cash - $525k.
- Arguably the best location in the city, so appreciation is pretty much guaranteed.
- In the past 2 years it went up in value approx $100k without any work.
- I'm a buy and hold investor, usually hold for 20+ years.
- Being paid off and after all expenses, cashflow is $2,308/month.

Here are Investment Returns after calculating rents; taxes; insurance; capex; maintenance etc.
The columns are: Year 1, 2, 3, 5, 10, 20, and Year 30. 

Here's my dilemma - Looking strictly at cash on cash, it's quite low, and it'll take 10 years to get my money back. However it's located in a very high demand location that will only get more expensive with time. What are your thoughts on these numbers? Considering that I usually hold rentals for a long time, does it make sense to hold this property; or sell and 1031 into one that has better ROI and COC but not in the same location? I should mention there is some room to increase rents to the absolute max it can get, which might backfire. If I do that, here are the new numbers:

[Edward Liu]

You should refinance this property, somehow take as much cash out to still have positive cash flow and invest in something else.  

First all, you can not assume property will always appreciate at rate of last few years.  No matter where you live, these rate of return is not sustainable.  I live in one of the more expensive areas in the country (medium house price is $2.67M in Dec 2017).  It took 8 years for home price to get back to 2008 level.  Don't assume you will have $100k appreciation every 2 years.

Second, use leverage to maximize returns.  Same amount of cash can produce a lot more returns when leveraged.  For example, in 2016, I sold one of my rental townhouses (with mortgage and lot of appreciation) in the bay area and ended with 650k in cash from the sale.  I used that 650k cash to trade for 60 units outside of CA in many cities, leveraged (with many loans) to purchase properties worth about $1.5M.  Today, these 60 units conservatively are worth about $2.2M+ with strong positive cash flow.  One of properties I brought for less than $500k in Dec 2016 - I am in the process of selling it for about $925-950k.  3 offers is on the table waiting for me to decide this weekend.  If I kept the rental townhouse in the bay area, in the last 2 years, it would have appreciated by about $200k.  Is $200k appreciation bad?  No, but we can do better if used the money wisely.

My advice is never pay cash unless the deal is so small that it is not worth the effort to get the loan.  I can easily pay off many of my loans, but never do.  Due to inflation, money will be worth less in 10 years.