Should I sell my rent house and put the money in the s&p500?

[Taylor White]

I'm trying to work through some investing thoughts and would love to hear other people’s thoughts/opinions!

Theoretically, right now, I could sell one of my rent houses and not have to pay capital gains on it (because I lived in it for 2 of the last 5 years.) I think I could sell it for $175,000 or so. I owe ~$76,000. So after selling fees and repairs, I should end up with at least 75,000. So here is what I'm seeing in "keeping" vs "selling"

Keep: cash flow 5-6k per year. After 25 more years the house will be paid off and worth probably $400k. I will also probably have spent ~50k on repairs and renovations in that time. So house value + 25yr cash flow - expenses should be about 500k give or take...

Sell: Put the 75k into something safe (probably just a mix of index funds) assuming an average of 8% per year for 25 years, should come out to over $500k. And I won't have to deal with clogged toilet phone calls for the next 25 years haha

Am I missing something? Even keeping the house after it's paid off and cash flowing $20k/year doesn't compare to the average gains of the $500k in the s&p. Also, I haven't factored in the tax benefits of keeping it, but that gets complex and hurts my brain.

I always lean toward holding my properties, but the recent surge in DFW prices and the closing window of being able to sell this one without CG taxes has me re-thinking..

[Joe Villeneuve]

...or, option 3,

SELL and use the proceeds as a 20% DP on a different cash flow property.  As your equity grows, you are losing money.  Your property is the one that's making money, but you're not.  In order to get control over the equity (property's profit), you have to sell the property.