NY Inherited Home: Should we sell low or try to rent (AirBnB)?

[Karen Spriggs]

Hi expert investors,

My husband's family inherited a large, gorgeous, historic 4 bedroom, 2+ bath, 3500 square-foot home in mid-state (upstate) New York (university town).  They wanted to sell the house and had it on the market for years while renting it to faculty from the nearby university.  They started the list price at $149K!!   As any of you who live in, own, or have purchased property in New York know, the biggest issue is property taxes.  We've paid for the home at least once since it has been on the market.  The taxes have been appealed and reduced but are still ridiculously high.  The realtor for this house/town is subpar at best (that's putting it kindly).  Since it was the first homestead in the town, it has historical significance, but it is old (1870s) and needs repairs periodically (painting, roof, plumbing, septic, especially).  It was completely remodeled in the late 90s/early 2000s.   It is located right across the street from a major university.  The family has offered to donate it to them, but the university has put that off (long story--bureaucracy is short version).  

The current renters considered a rent-to-buy situation but it looks likely they will be moving away by this fall (been there three years).  We don't want it to be left empty for winter.  There is an investor in town who has inquired a few times about buying it (wants to do so without the realtor commission) but has not followed through.  Now we need to put it back on the market or decide what to do with it longterm.

Can I get your input on what you would do:  sell it (at $119K, $109K, ??) or fix it up a bit more -- possibly add another bathroom, and rent it out on AirBnB?   The university town does not have many places for short-term rental (never enough for events in town -- during the year and especially in summer when they have a few big festivals, including a music fest), so short-term rentals are a plus there.   Then there's the problem of shortage of good contractors who follow through and don't gouge for work (not great either) completed (or not completed).   Timing is critical for this, so I'd appreciate your thoughts and opinions.