Sell or Keep? What would you do?

[Lee Brown]

I built a new house about 2-3 years ago. It’s in great shape. I have been renting it out and it brings me about 200-300 in passive income. The tenants have just shown interest in buying today and I could be in a great position to pocket 25-35k in equity.

Here’s my situation. I have about 16k in liabilities that id like to liquidate ASAP and I have the capital set aside right now that I could do it without selling the house. HOWEVER it would drop my capital pot down more than I’m comfortable with.

Option 1: sell the house get capital to pay off some liabilities and get 450/mo back in my pocket from not having payments on those liabilities but lose the house. (I’d still have some $$ left in my capital pot after paying off liabilities)

Option 2: keep the house and the liabilities which or low interest bearing loans and ride it out while keeping my capital pot ready for future investments?

I think I know the best route but I’d love some other perspectives and feedback to help me expand my thought process. Thanks!