We would buy a house live in it for 2-3 years then on to the next and rent the old one out.

As a starting point: -If they work full time and make $700k a year -Don't want to or can't spend time self managing a short-term rental -Don't have a spouse who wants to take the lead on managing the rentals They are likely not going to directly reduce their taxable income with real estate year-to-year. 

Whether it makes to sell the rental or keep it depends on your answers to these questions. the property is producing around $855 after property management fee, I have the same tenant for almost 3 years That's a little over $10k/year in cash flow, which is very strong yield for the price.

that we’ve learned in our 24 years, managing almost 700 doors across the Metro Detroit area, including almost 100 S8 leases:Class A Properties:Cashflow vs Appreciation: Typically, 3-5 years for positive cashflow, but you get highest relative rent & value appreciation.Vacancy Est: Historically 10%, 5% the more recent norm.Tenant Pool: Majority will have FICO scores of 680+ (roughly 5% probability of default), zero evictions in last 7 years.Class B Properties:Cashflow vs Appreciation: Typically, decent amount of relative rent & value appreciation.Vacancy Est: Historically 10%, 5% should be applied only if proper research done to support.Tenant Pool: Majority will have FICO scores of 620-680 (around 10% probability of default), some blemishes, but should have no evictions in last 5 yearsClass C Properties:Cashflow vs Appreciation: Typically, high cashflow and at the lower end of relative rent & value appreciation.

You will be left waiting years, with your own domino effects and legal bills, for the mess to resolve.

I set my rent standards a little high and realized that rent is actually not that high.. we have a morgage on it and it looks like the house is selling for more than we originally paid 4 years ago.

We have worked with them for years. 

This is a home run in my book.I've been trying for more than a year to buy an investment property in my area and couldn't find one for which the numbers made sense.

With rental increases I could prob pay off my mortgage in 5/6 years which would net me 4K.

I'd imagine you've already lost at least two years worth of management fees in carrying costs alone.