My understanding is that the equity in the rental will be treated as an asset which will raise your EFC by 5.6% . The rental income will also raise the EFC.
If you sell the asset, you will still have the same dollar value asset except as cask so that is a wash. Losing the income will lower your EFC but most college gap.
Is the 25K return after expenses? You have a 75k asset generating 25K in income which appears to be one heck of a return. Can the you do better investing the 75K?
If you have normal 9-5 jobs, run the NPC without the rental and see what you get. If you receive little to no aid then selling the rental to avoid income makes no sense. Running the NPC with the rental income might not be accurate since many schools will add back you rental deductions. This will highly likely for profile schools.