(Terminate a lease means something else.)If you find properties that are rented below market, the first question might be: how much work is needed to refresh the unit to earn market rents? 

Have you tried a design refresh or any other strategies, and has it faired well?

You could put that toward a Japanese cash flowing apartment.

--> It might also help to give the property a design refresh, and putting wallpaper up behind the beds would add a nice punch of color to the home.

You can likely get closing costs for that loan at less than $500 and a comparable interest rate, maybe even lower (if you have the equity + cash).2) It's good to plan/budget for all the expenses you have, but if this is going to be a refreshed home, repairs and maintenance will likely be far less than 5%. 

.- It is time to refresh the unit to stay competitive with market?

The mission beach STRs have been down for only a week so far for a refresh and change of management, but the Pt Loma one has been down months for various reasons.  

The fact the term 'landlord' and 'master bedroom' and 'mother in law suite" is allowed in California is shocking (I'm being honest).The state that says "pregnant person" rather than "pregnant woman" should have 'refreshed' RE terms by now. 

With Craigslist, I refreshed the post every ~4 days and filled the unit within 10 days.

For example, working with a turnkey provider will allow for passive income as long as the provider is a jack of all trades (acquires property, rehabs property, leases property, manages, services and refreshes property).Best,John Gutman