Rent or Sell - Does cash flow trump potentially higher returns?

[BrickByBrick]

Hello all - looking for some advice on whether to sell my house or rent it out.  Three options as I see it with numbers:

Current Mortgage Balance: $93,565.39
Interest Rate: 3.75%
What I could sell for: $180,000 (conservatively - similar comps nearby are $190K)

Option 1 - Rent it out:

Accounting for rent, mortgage, and an estimate of repairs/capex/vacany/taxes/etc I feel confident I can cash flow an average of $250/month.  So $3,000/yr.

Option 2 - Sell it: 

Selling house at $180k would in theory net me $75,600 assuming 6% RE agent commission.

Option 3 - Cash out refinance and still rent it? (not flushed out yet):

I have not flushed this option out yet and don't have a quote yet, but according to my numbers if I assumed $180K appraised value (should be more), a 80% LTV would mean I could cash out refi up to $144,000 of value. Delta of that and mortgage balance would be ~$40k.  This would reduce potential cash flow as a rental down to ~$50-$100/month, but still technically positive.  At that point keeping it as a rental would be an appreciation play and continuing to let the mortgage wind down and slowly growing equity.

Why do I have so much equity?  Local market is fairly hot and has appreciated quite a bit in recent years, but a large chunk of the equity is that for a few years I was under the philosophy of "pay off the house".  I am no longer under that philosophy and regret my previous paydown of the mortgage.  On one hand I want that cash back, on the other hand I want to grow a rental portfolio.  I do not "need" the cash, hence I was leaning towards renting it out.  But I recently reran the numbers with the small drop in interest rates recently and it opened up the possible option #3.  At the same time my rerunning of the numbers seemed to indicate my return for renting it out could too easily be replicated by just investing the equity into the market with much less hassle, which tells me maybe it's better to sell and use the equity to invest in a new actual rental property.  So I am a bit conflicted, and go back and forth on the best course of action.

So I post my situation here for advice and to see if anyone thinks of something I missed.

Also potentially relevant info for responses:

I have enough money for a down payment on a new house for myself already (as I was originally planning on renting it).

I did get a HELOC on this property to potentially tap some of that $40K if needed, but I don't like the idea of investing on other rental property with that $40K with it's own interest attached to it when I could afford a downpayment with cash.  The HELOC closing costs are sunk costs at this point anyway.

Thanks in advance for any and all replies.

[A Fella from Stella]

Cash flow can be better, but so could the cash flow of holding the cash until the market bottoms out and investing in the stock market.

Also, selling the home you own leads to 0% taxes, though there are breaks on depreciation, which can allow you to claim a loss even if you have a profit.

THE BIG Q: Have you always wanted to try this? If so, do it. You're in the position to at least try. But would you consider taking this cash and buying a multi-unit place?

[waltworks]

Post the actual numbers/assumptions if you want a decent answer. Usually when people don't break out their expenses, it means they are fooling themselves and don't want to have any of their assumptions questioned.

-W

[ecchastang]

As the above poster said, reveal your numbers for a better assessment of the property.

Mortgage payment amount?
Taxes and insurancwe?
Rent?
Vacancy 8% of rent
Maintenance?
CapEx?