I wouldn't necessarily put a lot of efforts into improving/building/spending in hopes of staying booked solid, but it is a nice 'side hustle' for a pretty piece of land to bring in some extra income while it sits. 

Like aircraft checklists and vehicle operators manuals (the -10s), one can benefit from extensive research, trial and error, and deliberate improvement principles gained by the many that have gone the path before. 

What is your skillset or time availability, what is your network currently like and do you need to improve that?

You don't have a great case for a tax appeal here because it looks like it was upped based on the renovation and improvements done prior to you buying it.

If not, selling the house to an investor could be quicker to access some cash. 

@Jaycee Greene I met with the credit union and waiting on an appraisal but pretty certain I'll access to around $80K @ 8%.

For subdivisions, a civil engineer can help create plats and an improvement plan showing how utilities will be implemented.

You would have to improve the property (dramatically) at great expense to actual meet that definition and use it as a townhomes.

Alternatively, consider a cash-out refinance to access equity without triggering capital gains or explore a 1031 exchange to defer taxes by purchasing another investment property.This post does not create a CPA-Client relationship.

🌞6️⃣ Rental Income Deductions: Earn income & deduct related expenses.7️⃣ Home Equity Loan Interest: Deduct interest if used to improve your home.8️⃣ Military Moving Expenses: Active-duty?