We own rentals and have the same quandry. Very large % of appreciation on all of them in the last couple of years. Be sure to evaluate the payoff of your home with any long term passive income goals. I am tempted to sell, but we are in a buy and hold for passive income business model AND are stock market phobic (no REITs in our future).
We did recently decide to list one property as it is very old and comes with some tenant drama we would like to not be a part of. It cash flows as well as our other properties. It hasn't sold so after 90 days we will take if off the market and will go back to buy and hold. Our plan was to combine with money from the sale of our large anti-mustachian primary residence to pay cash for something smaller and more tenant friendly as we want to RV travel when we retire. We can still accomplish that more slowly as I am still working. It felt like a great idea to try kill two birds with one stone.
I will be watching to see what you decide.
Ah and definitely do the math as the depreciation recapture is a killer. You are early in that process so now is likely your best chance to get out, after 10 or more years selling (unless you do a 1031) will come with a big tax bill.
My biggest issue is losing that monthly income. We've enjoyed our business model thus far (PM to handle tenants, DH handles all maintenance). Expenses have been low overall, with a few bumps along the way.
I am conservative which means having our residence paid off hits close to home and was how I was raised. However tying up money in our house is not the best use of the money either.