As both an investor and a mortgage broker who has personally used both options, I can say there are benefits to each.It ultimately comes down to comparing the two side by side based on your specific situation.

If it is your primary residence as indicated, just sell it and skip the 1031I Persue all 3 payment options concurrently and see which pans out as your best deal.

I am perfectly fine holding X amount in real estate.If I do see an opportunity another option is to lock it up and sell one of my existing if I think this property will perform or appreciate significantly more.

Any properties you’d consider swapping out for higher-yield options?

I’ve been researching options like offering fully furnished rentals for traveling professionals or executives, especially with major employers expanding their footprints in the region.

However, if managing tenants isn’t something your parents want to deal with, selling after renovations could also provide a large profit.Feel free to reach out if you'd like help with running numbers or considering financing options if you go the ADU route → I’d be happy to help!

There are towns that are not too far where there could be some options for you, but I would start going to real estate investor meetups and pair that with books and podcasts.

Lol Have you done many lease options as a buyer over many year term? 

Seems like too much work for too little return UNLESS you own the property, or perhaps have an option to purchase the property allowing you to capture any increase in value.   

One of those options is to let the tenant know you won't renew their lease, then offer them the opportunity to leave early if they find another rental.