I depends on your age and if you need the rental income now for expenditure or if you’re still in the wealth accumulation stage. If you’re counting on the rental income to live, I’d rent it out. If you’re in the wealth accumulation stage, I would refi, take some money out and buy more rentals. A loan will help reduce your taxes as well, how much savings depends on large your loan is. If you have a big enough loan, you can technically count it as a loss in the IRS’s eyes because of the various deductions.