Before committing to paying off the property, analyze whether there are ways to optimize revenue, such as better marketing, adjusting pricing, or upgrading the property to attract higher-end guests.Return on Capital: If you pay off the mortgage, the “return” is essentially the 7% interest you’re saving.

A real estate tax pro  can help optimize deductions, ensure compliance, and avoid costly mistakes most importantly so that would be the next step 

The cons as i see it include loosing the 2 of 5 year cap gain exception, typically not an ideal rental because the emphasis at purchase was buying a good home for your family and not a rental with optimal return (my ex-home consistently has the lowest cash flow for equity in my RE portfolio), not disconnected enough from the property causes addition angst on damage and may result in over improvement.  

Even with the discount, the investor will be a life style investor who wants to own in PR more than optimize return.  

Purchase price: $62,950 Cash invested: $45,000 Single family home with all the Capex updated making this home a great place for an first time home buyer or someone looking to optimize there portfolio.

Equity growth is the priority with mitigating any cash flow loss or optimizing the property for superior cash flow.

Would this be an optimal win-win for risk reduction + tenant satisfaction?

Another good read is Optimize Your Airbnb By Daniel Vroman Rusteen.

Just my opinion but I think 2 years is too soon to consider exiting deals (minimal appreciation and less than optimal use of depreciation). 

I am considering working with a property developer in NJ to buy land, build a duplex/triplex and sell it (6-9 month time horizon). Is there any creative way to avoid/reduce capital gains tax on the sale ? From what I...