LTR (tenant wants to buy) vs STR conversion

[Herman C.]

Hi there~

I have a LTR 10mins from Med Center which is not making the return I expected; I think mostly is because of its floorplan. I have been thinking about turning it into a STR and had done enough market research to think it could be a successful venture. Had I not been bitten by the Airbnb bug, I would have put it on the market and do a 1031 exchange.

Now when I notified my LTR tenant about terminating the lease (month-to-month) he expressed interest to buy it (i just sort of mentioned a market price range on phone). I'd still do a 1031 exchange but am looking at saving 6% agent fees (roughly $17 to $19K) if I sell it to him. (this is prior to any serious negotiation which might happen later).

I don't think I need to put a lot of investment (<$4000) to turn it into a nice STR vs if I sell and buy another one to do STR there's time and unknown (currently hot market).

How would you guys evaluate these 2 options or maybe there is a 3rd?

Thanks!