After expenses and mortgage, I end up with a net cash flow of anywhere b/w $150-$250 which I find rather small, and I wonder if this could even get eaten up by tax filing time.

South Carolina, specifically Greenville, is often pretty attractive to us just over the line in North Carolina, but keep in mind that as an investor you'll pay MUCH higher property taxes there. 

Is it worth waiting until September and hope the market is still as strong or take the hit on capital gain taxes and sell now.Secondly, if we do hold this property would it make more sense to prioritize debt paydown (instead of investing in another property, put our cash towards our mortgage payment and have it paid off within 10 years.

There are also tax issues. 

For property owners with out-of-state investments, is it necessary to keep all receipts and invoices for write-offs during tax season, even smaller jobs performed by the PM's handyman?

As long as you have positive cash flow on debt that is tax advantaged you are not over leveraged.

We have a property in costal NC and selling is just a death trap of taxes.

We would have a positive cash flow of 150-200$ after property taxes and property management fee.

Welcome Brandon - I have properties here in the wyoming valley.I am a native to the area.Scranton has many hoops to jump as an investor - esp. an out of the area investor.One is you'd have to hire a property manager if you do not live in the city of Scranton or within 20 miles of the city.Real estate taxes are high -that plus the current interest rate and ask prices makes cash flow an issue.You can find "deals" but please do your due diligence.Here is an example of a potential deal I am evaluating in the hill section of the city: 20 y/o, 2000 sq ft. 3b/3bath TH - Needs paint, new carpeting, and general wear and tear repairs after a 4 year tenant.

Factors such as higher interest rates, taxes, and insurance can significantly impact potential returns for investors.Remember, success in real estate investment often hinges on buying properties at the right price rather than selling them.