Remember the three cardinal rules of real estate: location, location and location.

I don't know where the property is or anything about the area. I don't know how old the property is or what the growth/appreciation prospects are for the area.

You don't have to worry about capital gains, because you're currently at a loss: $135K purchase vs. $105K value - right?

You have a positive cashflow, though it's rather thin. You have a nice percentage of equity, a very good interest rate and (it sounds like) a stable tenant situation.

Again, not knowing your area, if you could sell for $105K, let's say you netted about $95K. Then you paid off the $50K. So you'd be sitting on $45K in cash. What are your plans for the $45K?

Or, considering that you probably bought near the top of the market back in 2007 and you've now probably ridden out the worst of it, if this is a decent and growing area and the property is in good shape, like you said, it'll be paid for in 10 years or so. Where would you guesstimate the value at that time? $140K, $150K... $120K??? I know that you don't KNOW (none of us do), just as you don't know what the value of a stock or mutual fund would be over that time period. But if you think that you could pick up a decent percentage gain in asset value and at least break even on the income front (before tax benefits), this isn't exactly a bad situation that you're in. Given what you've said so far, it's kind of an either/or... no truly bad options really. No home runs, but no strikeouts.

I don't know your personality or your age. If the thought of being a landlord gives you heart palpitations, then you should definitely sell - no matter the price. But if being a landlord has been a relatively painless experience, in my view, you could be sitting on a paid for $120K+ asset in 10 years that nets you around $800 a month, even if the rent never increases (not counting vacancy, credit loss or maintenance). If you took the $45K that you netted from the sale and went all-in on stocks now, assuming a 7% compounded annual average return (to make the quick & dirty math easy), you would roughly double your money in that time period - so $90K. But, they could find a waste disposal area under the property... or you could buy into the next Enron. No way to know the future.

Short answer after an admittedly long post (sorry), if it was me, unless I needed the money or already had a great investment lined up, I'd probably sit on it... if the area met my expectations.

Good luck with it, whatever path you choose.