Especially with the favorable tax incentives offered to buy and hold real estate vs the ordinary income tax you'll pay on private lending.A 1031 exchange would allow you to indefinitely defer all of the capital gains tax you would have to pay, and instead use it to purchase better performing property/properties.

Your requirements to defer all tax are to purchase at least as much as your net sale and use all of your net cash in those purchases. 

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.

@Jake Hughes A 1031 exchange is a great way to indefinitely defer all of the capital gains taxes, and gain access to that tax to use over time for your own benefit.

The second of two homes I bought when I sold the rental, I would have bought a more expensive one as the one I got was close to the university and tended to attract students which had higher turn over (though it may also be my local market).I'd also look up how to do a 1031 (I think that is what it's called, I'm not in the US) where you defer capital gains taxes on rentals by buying another within a set period of time.

Utilize a 1031 Exchange: Under IRS Code Section 1031, you can defer capital gains taxes by reinvesting the proceeds from the sale into a similar “like-kind” property.

This allows you to invest in real estate without triggering the 10% early withdrawal penalty or income taxes, and the gains can grow tax-deferred (or tax-free in a Roth IRA).

However, I would defer to architects for a definitive answer.Sometimes it's just that an architect doesn't want to be told what to do by a contractor.

The transaction allows investors to increase the liquidity and diversification of their real estate investments while deferring costly capital gains and depreciation recapture taxes that may result from the sale of a property.Benefits: REITs also can provide the same ongoing benefits of real estate ownership including income, depreciation tax shelter, principal pay down, and appreciation.

Having a fee causes deferred maintenance and the tenant to fix the issue themselves which often causes more issues.