Do I have to use a 1031 exchange to reinvest my equity to a STR?

[Cody Smith]

Hello BP, thanks for reading my post and the helpful responses I always get!

I currently have a single-family rental in the market I live in, Columbus, GA. I purchased this home in 2017 and lived in it as my primary until September of 2020. Since then, I have rented this property out and managed myself, I am currently bringing in about $700/mo dirty cashflow. Since purchasing this property, I have gained about $80,000 in equity in the home. 

I began looking into purchasing a short-term rental a few weeks ago. I initially planned to keep the long-term property and buy the STR with my own available capital, but now I am heavily considering selling the LTR and reinvesting the proceeds into a vacation rental condo somewhere on the gulf coast. Although I will be losing the LTR in the process, this exchange of property will take me from $700/mo cashflow to potentially significantly more per month, which is most important to me at the moment as I prepare to separate from the military in two years and lose my W-2 paycheck. Additionally, the LTR is due for a new roof and HVAC relatively soon, it's in a great location to sell fast, and I do not have the capital to keep the LTR and still purchase the STR condo. My thought-process is to trade an asset I paid nothing out of pocket for (VA loan on the LTR) and reinvest the money I have made into something that brings more cashflow to my pocket and I know will appreciate over time and be in demand since it's a condo on a very popular beach.

My question: since I lived in the property for 2 of the last 5 years, do I need to explore a 1031 exchange for the proceeds upon sale? Or am I able to take the proceeds as normal and just reinvest what I need for the down payment on the condo? I have tried to research this already, but I have not found clear guidance. 

Thank you!