Tough it out and I think you will be glad you kept it.

I'm not saying it wasn't a good investment or that the rate of return is 5.2 or 7.2. I'm saying now, if its worth 500k... Your return on equity is that.

Real estate has great rates of return due to leverage, but the closer it gets to being paid off, the return on equity declines. I find many real estate investors evaluate based on dollars of cash flow versus return on equity.

Real estate investing is very hard to get out of because of the taxes and costs. That's what most answers suggested you borrow against the equity versus selling it.

Agree it's a personal decision - except he posted on a message board asking for other's opinions. In this discussion, the OP is needing cash (for expense not to invest). So he either has to sell it, which will likely cost dearly in taxes and fees, or borrow against the equity.

If he borrowed, HELOC would be ideal. If he could only find a cash out ReFi, he would then need to buy something with the equity (real estate, stock market, fixed income, etc.) to generate additional income to cover the new loan and the additional college cash flow needs, or just use the cash out to pay the expense, which would lower his overall cash flow. This is just the reality as he has an upcoming significant expense (college) that he hasn't otherwise prepared for (accumulated a liquid college fund). If he does a cash out ReFi, he can't now or later set up a HELOC or otherwise cash out on the property without first refinancing the balance (no big deal assuming rates drop over time from here).

Real estate is a really inefficient investment. The leverage component makes it a good investment for building wealth, but you are stuck with it until you die in many cases as the tax and transaction costs can be so excessive to get out. Then accessing the equity requires expense, qualification, and an institution to offer that product.... And diminishes cash flow to access it and pay it back. You can't reasonably just sell $100,000 worth of your real estate asset (fractional selling).

In reality, OPs likely only real option is to borrow the equity to free up the cash, which spreads the cost of college over the life of the loan at the interest rate of the loan.

I own investment real estate... And I hate it. I'm getting great NET return on equity of about 17% right now. But I know I'm going to lose a good chunk of what I gained to get out or if there is any significant damage or maintenance expense (or insurance challenges/costs, vacancies, damage, etc). Add in that I think it's a joke that it's referred to as PASSIVE income.

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If he borrowed, HELOC would be ideal. If he could only find a cash out ReFi, he would then need to buy something with the equity (real estate, stock market, fixed income, etc.) to generate additional income to cover the new loan and the additional college cash flow needs, or just use the cash out to pay the expense, which would lower his overall cash flow. This is just the reality as he has an upcoming significant expense (college) that he hasn't otherwise prepared for (accumulated a liquid college fund). If he does a cash out ReFi, he can't now or later set up a HELOC or otherwise cash out on the property without first refinancing the balance (no big deal assuming rates drop over time from here).

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The above is true for owner occupied properties but for a non-owner occupied properties. You can have a cash out mortgage and then take out additional cash later or set up a HELOC behind a cash out. The Texas A(6) laws you are referencing are for homesteads only. The A(6) laws di not apply to investment properties. However, lines of credit are MUCH more expensive on investment properties then they are for homesteads. They are typically going to be in the double digits.

My suggestion if the OP wants to borrow from the house is to borrow no more then 60% as that will give him the best fixed possible (rate would go up if borrowing 61% or more) and also allow the rent to still cover the payment with the new mortgage interest being tax deductible. of course if 30% LTV is enough money that would work too.