In such markets you can go the route of being a hotel alternative, which is cheaper regarding furnishings, or being a destination and experience.If your focus is most on appreciation, however, you may find more opportunities for such in markets that are more saturated regarding STR.

A client made an over asking offer on a $775K+/- that was not accepted due to an alternative cash offer.

That means:Depreciation recapture under IRC §1245 is triggered at the time of sale.You’ll pay ordinary income tax (not capital gains) on the depreciation taken on these components, including bonus depreciation.Even if the replacement property has similar assets, the IRS treats them as newly acquired, so the prior depreciation is recaptured and taxed.Tax mitigation strategies:New cost segregation on the replacement property to front-load fresh depreciation that can offset income (especially useful if you qualify for REPS or STR material participation).Strategically use suspended passive losses or time the sale during a lower-income year to reduce your effective tax rate on the recapture.Consider installment sale or partial exchange structure, if applicable, to spread gain.Let us know if you'd like our downloadable 1031 exchange, we can send that over to help you build out your roadmap.This post does not create a CPA-Client relationship.

.)- Material Participation- Cost Segregation/Bonus DepreciationKrishnan.

Buying a new rental and doing a cost segregation study in 2025 can generate large losses, but those losses are passive unless you or your spouse qualify as a Real Estate Professional (REPS) or meet the STR loophole (material participation in a short-term rental).If you qualify, the losses can offset W-2 income, capital gains, and recapture.

Options that I have seen thus far are ~$2.6K per door at the most affordable level.Given its a rental, even though it is a luxury rental, just trying to see if there are more affordable exterior door alternatives out there.Thanks!

     Although I know Wikipedia has questionable credibility, their writeup about Structured Sales seems to indicate that that process can be a workable alternative to a 1031 exchange or a 721 exchange. 

Create a Joint Venture Agreement that specifies the following: Recitals; Rights, Duties, and Responsibilities of each person/ entity entering into the agreement (Who will pay for what to include, but not limited to any down payment, holding costs such as Property Insurance Premiums, Utilities, HOA Fees if any, Rehab Materials, Contractor Labor, Loan Payments, etc.).

And all you (or maybe you and spouse) need to do is materially participate.

The other 2 being still being able to take advantage of tax benefits by materially participating, and having an option with lower impact on cashflow.