Quality furnishings, attention to detail, and seamless operations helped set the property apart, maximizing its earning potential.

and also like what I do Utilize as STRs: You furnish and list these properties as short-term rentals (STRs) on platforms like Booking.com or Airbnb.Generate Cash Flow: The higher rental income from STRs, compared to long-term rentals, allows you to cover your mortgage/lease payments, generate positive cash flow, and potentially have funds left over for further investments.Positive Cash Flow: STRs often generate higher rental income than long-term rentals, allowing you to cover your costs and potentially profit.Tax Advantages: You can often deduct expenses related to your STR business, such as mortgage interest, property taxes, and maintenance costs.

You do need to partner with a good operator, and there's plenty of mediocre ones out there. 

It is my understanding that I could form the LLC in my state and apply for a certificate to operate in the state where the rental is.  

Since rental losses are typically passive, the best way to offset W-2 income is through Real Estate Professional Status (REPS) (750+ hours) or Short-Term Rentals (STRs) (100+ hours and more time than anyone else managing the property), which allow real estate losses, including depreciation, to offset active income.A cost segregation study accelerates depreciation, generating large upfront deductions.

I don't know if shifting to MTR could generate greater interest but it doesn't solve the marketability issue and all you are doing is punting the root issue down the road. 

You are buying into a business to pass down to future generations, not to mention a vacation home or retirement plan.When I talk about my investments I don’t talk about a 4 unit ugly building in (insert boring/cheap state in the US).I talk about Europe!

Hey Spencer - It sounds like a great idea to generate some extra income with your empty room!

By definition the first couple of deals in any portfolio that are fortunate enough to exit early will generate huge IRR.

Single family is restricted to single family, no income generation.