Should I pay off the mortgage on my rental?

[Rich Corey]

I am a W2 employee that has owned a single family home rental for over 10 years in the Sacramento area.  I consider myself to be a fairly conservative investor and my strategy to date has been to pour the cash flow from the property (~$400/month) back into the mortgage to try and pay it off sooner.  At the rate I am going, I had planned on having the home fully paid off in 8 more years.

Recently, I have been considering selling off a portion of my stock portfolio in order to pay off the remaining $75K on the mortgage right away. I have done a basic ROI analysis comparing continuing to hold the stock for 8 years (as is scenario) versus the pay off scenario which would result in increased cash flow (no more mortgage). Even in my "worst case" scenario for paying off the mortgage (which assumes significant cap ex), I would need to see a 75% return in the stocks that I own over the next 8 years in order for holding the stocks to be a better bet.

While that kind of return is certainly possible, my reasoning for doing this is driven by the following:

- not sure anyone has noticed, but the stock markets been a bit volatile lately.  I don't think that's going to change.   The stocks I'd be looking to sell have essentially recovered to pre-covid values, so I'm not selling low.

- increased cash flow during these times seems like a good idea (assuming my tenant continues to pay rent)

- having a property completely paid off gives me a the peace of mind to begin growing my real estate holdings in the next 1-2 years

I know there are people with a lot more experience in this community and I'm wanting to get some thoughts/opinions on my approach.  As well as any additional considerations I need to take into account before making this decision.