Our experience was that the equity in the rental properties was considered it to be as liquid as cash, and eliminated any possibility of fin aid. So no, don’t pay off the mortgages on the rental properties, if you have any better place to put the cash. If you have a mortgage on your primary residence, you could consider paying that off - but I bet that you’ve got a nice low interest rate on your residence, so you could lose that benefit, and still not get fin aid.
I would strongly urge you to have both children create financial safeties - flagship in-state U, plus the generous southern/southwestern flagships. Seriously consider whether an extra 200K/child/college education is really worth it to you and to them. That money may do them more good as a down payment on a home - or you and your spouse may need it in retirement.