@Craig Cann I had not dealt with soaked carpet pads or wood subfloor but in a generic basis ozone treatment worked for us however I have heard others use enzymatic cleaners such as Nature’s Miracle or Rocco & Roxie are the best in getting them out completely. 

In short: $558k gross, ~9% cap, modeled cash-flow of ~$92k/yr with professional management (or ~$140k if self-managed), and conservative 5-yr after-tax proceeds of ~$1.4M.I’m sharing the math, assumptions, depreciation treatment, and the risks/opportunities I saw (value-add ideas, occupancy sensitivity, and market comps).

In short: $558k gross, ~9% cap, modeled cash-flow of ~$92k/yr with professional management (or ~$140k if self-managed), and conservative 5-yr after-tax proceeds of ~$1.4M.I’m sharing the math, assumptions, depreciation treatment, and the risks/opportunities I saw (value-add ideas, occupancy sensitivity, and market comps).

Tax treatment has such a significant impact. 

The main difference is liability protection, not tax treatment.

That means depreciation recapture applies on your share when you report the sale.This is one of those situations where it’s worth having a CPA or tax attorney review the deed to confirm how title was structured, because that detail drives the tax treatment.

I'd have preventative treatments with a licensed vendor consistently, as often as it takes to mitigate the issue regardless of cost.

In short: $558k gross, ~9% cap, modeled cash-flow of ~$92k/yr with professional management (or ~$140k if self-managed), and conservative 5-yr after-tax proceeds of ~$1.4M.I’m sharing the math, assumptions, depreciation treatment, and the risks/opportunities I saw (value-add ideas, occupancy sensitivity, and market comps).

That means more of your cash stays in your business, not the IRS’s pocket.For many buyers in this market the ability to offset income and reinvest tax savings is a major advantage — and it strengthens your underwriting.Since STRs have strong appeal (friends & family groups, weekend escapes, high-end amenities) the sooner you position it as a business, the better your financial outcome.Your Step-By-Step Playbook for Cost SegregationHere’s a practical checklist to make cost segregation work for you in an STR:Buy/underwrite with tax strategy in mind: When you evaluate a property, include cost segregation as part of your operating model (not just nightly rate and occupancy).Engage a cost segregation specialist: You’ll want a qualified provider who understands STRs (they’ll allocate assets into proper shorter lives, document everything).Structure operations for “business” treatment: Track participation (guest communication, property maintenance, marketing) to lean into non-passive income treatment.Conduct the study early: Ideally in the year you take service (purchase or major renovation) so you front‐load benefits.Keep detailed records: Invoices, improvement costs, design/furnishing upgrades, hours spent managing.

Ask the custodian about fees, funding timelines, and check processing so your deals don’t stall, and run your plan by a CPA to confirm UDFI/UBIT exposure and tax treatment before you commit.