Should I sell my property in Marathahalli, Bangalore, and move to the outskirts? Need financial advice.

I own a 1200 sqft property in Marathahalli, close to the bridge. The land was bought in the early 2000s for 2 lakhs, and about 4 years ago, we built a commercial + residential structure on it.

Current Situation:

• Rental Income: ₹1.1L/month (excluding the portion we live in).
• Potential Additional Rent: If we move out and rent our space, we could get an extra ₹45K, bringing total rent to ₹1.55L/month.
• Remaining Loan: ₹64L.
• Potential Selling Price: Around ₹3 Cr.
• Future Purchase Plan: I don’t want to take another loan to buy a new property.

The Dilemma:

Now that we have a kid, living here feels frustrating—there’s barely any space to walk, and the crowd and congestion are overwhelming. I’m seriously considering selling this place and moving to the outskirts for a better quality of life.

Options I’m Considering:

1.  Sell the property, clear the loan, and buy something in a more peaceful area (without taking a new loan).
2.  Hold onto this as an investment, rent out our portion for an extra ₹45K/month, and rent a house elsewhere with better living conditions.

What Would You Do?

• Is it smarter to keep the property and earn passive income or sell and move for a better lifestyle?
• Financially, which option makes more sense long-term?
• If I sell, where would you suggest investing the money for good returns?