Pin down the goal first: more cash flow today, or the biggest possible legacy for your heirs. The right move flows from that answer. If legacy is the priority, selling outright and paying capital gains is usually the weakest option. Highly appreciated real estate is one of the most tax-efficient assets you can leave behind, because under current law the basis steps up at death. Heirs inherit at the stepped-up value and can potentially sell without the tax hit the original owner would have faced. Under that lens, a 1031 exchange of the investment properties into something larger, deferring the gain until the properties pass to the heirs, is a very strong path. One boundary to know: a 1031 covers investment property, and a home used as a personal residence sits outside it. If the goal is expanding without selling, a home equity line against the free-and-clear rentals can pull out cash to acquire more real estate while keeping the existing properties and their deferred gains intact. Neither route guarantees appreciation, and the right structure depends on income, reserves, and the estate plan, so run the specifics with a 1031 specialist and a tax professional. This is also exactly the kind of portfolio-and-financing question we're glad to map out in the free Roadmap conversation (about 20 minutes) where we run your real numbers.