Should I sell for a loss?

[Gabe Walters]

I'm looking for some advice on whether I should sell one of my properties. I currently have 3 short term rentals in the smokies. The last one I purchased was right at the peak in March of 2022 and when rates started to rise. For whatever reason this one just doesn't perform as well as our first two. The last two years I'm basically breaking even on the rents, but after cap ex I'm out $2000-$3000 so far. Demand in the area is definitely down, competition has increased, and values have gone down since we purchased it. I do think we could sell it for slightly more than we sold it for, but we put around $40k into it for renovations. Then when you add in realtor fees, etc, if we sold I estimate it to be around a $35k-$50k loss. I'm a small time investor so that kind of loss is gigantic. So I'm just stuck on what to do. I put around $100k into the property, so we would get around $50-$60k back if we sold it. Should I just sell, take the huge hit, but then use that $50k-$60k for a better investment? Or should I just hold onto it , hope if breaks even or has a small loss every year, and pray that it gets better or values go back up eventually. The cabin is in great shape after all the renovations, in a great location, and has a small mountain view. But every year we are just one big maintenance issue away from a hefty loss. If it were $10k-$20k loss I'd probably just chalk it up as a learning experience and sell it, but I just don't know if I can stomach a $40k-$50k loss. Lastly, our first two that purchased were home runs so can float the monthly losses, but it's always going to cancel out our good returns on those. Overall this one will make me a better investor down the road, and has definitely made me more conservative when analyzing properties. Any advise would be greatly appreciated.