Cut losses and walk away?

[Sarah Poole]

Bought a condo at a ski resort in CO in May 2022 for $510k. Put down 15%, borrowed the rest at 4%. Originally planned to move in, or at least use substantially, but life had other plans so have been listing on Airbnb. First 12 months brought in $42k revenue. After all expenses, I sit around breakeven. This includes cleaning fees of around $7,500, which is 18%, HOA fees of $660/month, PITI at $2,200/month.

Since then, HOA has doubled from $325 to $660+ due to HOA insurance, property taxes increased. Maybe I can cover those costs with increased nightly rates, but also potential for less Airbnb traffic. It's a crap shoot. HOA would more likely continue increasing than decreasing.

Being an Airbnb host and managing from across the country has been a pain in the ***. There's always some issue with guests so I am constantly on call. I wanted out so my realtor listed for $549k. I have an offer at $500k that I am leaning toward taking, just to get rid of the hassle. After closing costs, I would walk away with around $45k that I would put in the S&P and not think about again. I don't anticipate a better offer will come in, and it's unlikely listing again in the spring after ski season will yield much better either.

At the same time, I am getting advice that my initial outlay could be worth $1M in 15-20 years, with someone else covering all or most of the expenses. This is not a property I anticipate being heavily cash flow positive at any time. In theory, I could get a property manager at around 30%, which would include the cleaning but cut into my razer thin margins and could be the difference between breakeven and a loss. This is an old property, and I can definitely see everything falling apart in the next few years and needing to replace appliances, window frames, etc.

Does it make sense to continue holding this property, or am I better off cutting my losses and spending my time elsewhere and not dealing with the headache?