This might be a stupid question but what is the expenses in the above scenarios? This does seems super simple enough.
Don't miss the point. Paying off the loan reduces your expenses, but ties up so much money, that it reduces your return.
I would try, if you can, to obtain a mortgage on the rental property itself. That way you can access your home equity for another property.
In scenario A, you have 20k invested in real estate. In scenario B, you have 100k invested in real estate (but at a much lower return). A scenario C would have you with 100K invested in real estate across 5 houses, all with financing, for a higher return.