What is the interest rate on borrowing compared to the rate you are earning, then take into consideration the tax consequences. 

No management costs as it would be self managed, and estimated property taxes by the average of the past few years.

I recommend that you find a trusted or recommended Mortgage Loan Originator (MLO), who can give you options for property-based loans (mostly investment loans) and they don't use your taxes but the P&L of the property.

However, before you do so you should ensure that your revenue from rental income covers ALL your property expenses in the townhome, including mortgage, taxes, insurance, maintenance/repairs, vacancy, property management, etc...

I would be beneficial to determine if they are other aspects of the property that make it a worthwhile investment (tax, appreciation etc). 

Let's assume your expenses (mortgage, taxes, insurance, maintenance, vacancy, etc.) comes to a clean $600 and the property rents for $1,000.

The property was rented and generated $160 cash flow after mortgage, taxes, insurance and property management fees were paid.

Hi Everyone,I  am a professional wholesaler and property locator, I locate property on/off market, do a full due diligence on title, encumbrances, taxes ect...

Focus on cities with favorable price-to-rent ratios, population growth, and employment trends, such as Des Moines, Oklahoma City, and Charlotte, while considering factors like landlord-friendliness and property taxes.

The 1031 exchange will indefinitely defer all tax on profit and all depreciation recapture.