Deciding to keep or sell short term rental

[Alexander Achim]

Good evening to you all. I am in a unique situation in that I built a cabin in gatlinburg  with a total cost to me around 570k that is most likely going to gross around 185-200k in yearly rental income . Cabin is worth around 2 million per latest appraisal and I’m trying to decide if the short term passive income is better or pay the long term capital gains tax  and attempt to buy something else .. good lots are getting harder and harder to come by and buying another cabin already built would not be a feasible option given price increases in the area. I also have about 150k cash in this investment . 

Any input would be greatly appreciated . 
very curious how other investors would approach this . 

[Dave Foster]

@Alexander Achim, A property that actually almost meets the fabled 1% rule of yesteryear?? the only negative to holding that I can see is that you do have significatnly higher holding costs in an STR. So the income to asset ratio is a lttle misleading. But that's a nice return.

However, if you want to sell you'll have no problem avoiding tax by doing a 1031 exchange.  Having 1.5 mil to purchase another 2 million is replacement real estate is a dream. You could take 1.3 and buy several places for cash.  Without worrying about this rate environment.  As prices drop you'll be in the drivers seat as a cash buyer.  Then you could take $200K and buy a property with 20% down.  This would satisfy your 1031 exchange.  You still get amortization of the loan paid by the tenants.  But  you also have several properties with plenty of equity that can be deployed at any time.  fut for now are safe on the sidelines making money for you.