I’ve learned a lot from Bigger Pockets, first time posting:

I’d love to get some feedback on where to go from my current position.

Background: we own two houses on a single lot in a residential neighborhood.  I remodeled and added a bedroom to the original house, and then built the second house after.  The first house is a 3/2 and the newly constructed house is a 2/1.  The property is close to a university, so the rent is quite high: $8300 between both rentals.  We purchased the property for $793,000 in 2020 for cash, and then financed a mortgage for building the second house later that year for $450,000 at 3% on a 30 year.

The property is worth about $1.8m now, with a mortgage balance of $420,000.  Our expenses are about $200/mo with a gardener, we manage it ourselves.  My calculated cap rate is 4.73%.

I just finished a full foundation up remodel on our primary residence, we owe $1.22m at 4.25% on a 30 year on the mortgage and have a private construction loan with a balance of 490k at 5% on a 20 year. It's worth about $2.5m and I still have to finish the yard and would like to eventually build an ADU. The rental above cash flows about $5,000 a month and helps offset the mortgage cost at $6300/mo.

My question is: we have a lot of equity built into the rental, but the mortgage rate is so low that my calculations show shifting the debt from the primary residence loans to the rental as being a wash with the tax savings. I can't find anyone who will do a second on the rental anyway, I have found a HELOC — I was debating at least shifting the construction loan over to the rental, but at 5% that still seems like a wash.

I’m open to doing another rental property, I just don’t know if I’m stuck because of how low the rental mortgage rate is, and with how much it cash flows — I may not be able to improve much on that situation.

My wife and I both work full time, and I have a part time second job to make it all work.  I would love any feedback on what to do.  We debated selling the rental to pay off our primary mortgage, our basis is at least $1.1m on the rental property.