They are also my low risk investment and emergency medical money. 

I know because of homestead this is mandatory on a primary residence, but I thought it is not required for an investment property since no one is claiming the homestead exemption. 

So a 1031 combined with the residence exemption might not be a bad idea at all.

Originally posted by @Varinder Kumar:@Karen O.You should speak to a tax pro.If the house was your primary residence for 2 of the last 5 years, you can get a $250k capital gain exemption ($500k if married). 

I have recently been informed that, the great state of Texas, offers reduced(or exemption) property tax rates for disabled veterans based on their VA disability rating.

You are also exempt from taxes going forward.

If it's rented, you are exempt.

A transfer to a trust is exempt from due on sale violations since banks will view transfers to a trust as an estate planning tool.

I tell them if they would like to explain any of it that I will take the explanation into consideration.Things like Divorce or Medical bills I would consider overlooking.

Keep in mind that many housing laws exempt those renting rooms from discrimination charges (you could legally rent only to women for example).