Payoff SFH rental - am I doing this ROI math correctly?

[Riyad Kalla]

I am embarrassed to ask this, but feel lost in almost a loop of analysis where both "A" and "B" answers seem to be the right one depending on the day of the week and phase of the moon.

If any of your more educated souls wouldn't mind looking over my shoulder on this one and let me know what you think, I would appreciate it.

Ultimate Question: Factoring out significant appreciation, would it be better to pay off a single-family-home rental than finance and buy another one?

Details

• Purchase Price: $242,500
• Finance: $100,000 down, Financed $142,500 @ 5.13%
• Mortgage Payment: $1141/mo (excuse slight discrepancies. I'm rounding these numbers by a few hundred $ to make even)

The silly calculation I'm doing is as follows and I'm not sure if it's as simple as this:

• Spending $142,500 to payoff the house would free up $1141/mo in income, x12 = $13,692/year
• $13,692 / $142,500 = 9.6% CoC

So as I'm shopping for new investments in this same city (strategically we have decided to stick to a particular area) - if I can't find a deal that can beat a 9.6% CoC return (again, ignoring appreciation), then is paying off this property the smart way to go?

I'm trying to see if I'm missing some major gap in my thinking here and it's actually a much lower CoC return.

Thank you all for the time!