When your rental(s) are paid off what to do next?

[Mel Rosario]

I few more years and a few of my rentals will be paid off.  I was going to use the income as my pension plan, but as I do more research, I was wondering what others do.  Should I....

1.  Do a 1031 exchange and scale higher?

2.  Use the income as a pension, but liability increases if a renter wants to sue.  Should I increase insurance and add an umbrella?

3.  cash out and refi for more properties?  If so, what minimum percentage do you maintain to keep lawyers away.  Ex 1m dollar property and refi just 100k because interest rate may be high like 6.5% etc

4.  any other suggestions

Currently, I haven't paid off the rentals because interest rates are low and money are in equities making 7% or more.  If living off the income should not be an option because of renters possibly suing, I still make money through other investments, SS, dividends etc.

Thanks for looking

[Chris Seveney]

Quote from @Mel Rosario:

I few more years and a few of my rentals will be paid off.  I was going to use the income as my pension plan, but as I do more research, I was wondering what others do.  Should I....

1.  Do a 1031 exchange and scale higher?

2.  Use the income as a pension, but liability increases if a renter wants to sue.  Should I increase insurance and add an umbrella?

3.  cash out and refi for more properties?  If so, what minimum percentage do you maintain to keep lawyers away.  Ex 1m dollar property and refi just 100k because interest rate may be high like 6.5% etc

4.  any other suggestions

Currently, I haven't paid off the rentals because interest rates are low and money are in equities making 7% or more.  If living off the income should not be an option because of renters possibly suing, I still make money through other investments, SS, dividends etc.

Thanks for looking

 no right or wrong answer. For #2 I am never concerned about a tenant suing, I have insurance for this and use a property manager. I also do not do anything stupid. 

For the other scenarios, of course the answer is "it depends" but not sure what you mean by keeping lawyers away. I worked for multi-billion dollar real estate investors and they never ran there business based on being scared of being sued, they ran it based on good financial and economic strategies. You seem more worried about being sued more than anything.