I lose $20k/year - help me w/ my strategy!

[Laura Williams]

Sooo I have three houses that are all former primary residences that are now rentals. None of the homes were bought with the intention to rent them out, so the sale price and mortgages weren't optimized to be rentals. The homes are in California and Texas and have very high property taxes. 

Basically the math breaks down to:

Home 1: 
6,800 in rent
6,928.40 in expenses

-128.4/mo

Home 2:

2325 in rent
3,206.57 in expenses

-881.57 / mo

(this one has a 15 year mortgage, so if we refi-ed to a 30 year expenses would of course be much lower)

Home 3

 4,500 in rent

5,164 expenses

- 664 / mo

This all adds up to a loss of $1,673.97/month or $20,087.64/year.

I can easily afford the loss. I make $500k+/year (with a healthy amount invested/saved every year.)

 I also make $30k/year in dividend income from my investments which I could use to cover the loss on the houses. 

So I'm of two minds in how to think of this. On the one hand, I'm getting three homes with a current valuation of $3m combined for 20k/year. That doesn't sound so bad. And since they all have fixed rate mortgages (theoretically! hopefully!) rents will continue to rise while my payments will stay the same. And one day of course I'll have the mortgages paid off and still be collecting rent.

BUT on the other hand . . . they are all money losers right now! I could sell some or all of the homes (they're all fairly recent, so no breathtaking appreciation, but no losses either) and just invest the money in index funds instead.

So . . . what do you think of my situation? What would you do?