Prior tenant had no complaints.Two different plumbers have gone there to investigate and neither smelled anything.

But each REIT has different strategies and goals.

The great thing is that I am open to a lot of different states, wherever I can benefit the most really!

Communities like Highland Creek are adopting different measures and requiring that a property MUST be owned for 12 months before it can be a rental. 

Recommend you first figure out the property Class you want to invest in, THEN figure out the corresponding location to invest in.If you apply Class A assumptions to a Class B or C purchase, your expectations won’t be met and it may be a financial disaster.So, when investing in areas they don’t really know, investors should research the different property Class submarkets.

Are there tax implications or liability differences?

There's a difference between carelessness and secondary language barriers.  

Your main difference is that you have to outlay cash to furnish short- or mid-term rentals, whereas you do not for long-term rentals.

Lending rules tend to be different for commercial loans and loans not for primary residences.

So there are a few ways to look at this, the 1st question is are you sure your renovation’s will double the property value, most renovations on primary residences, your lucky to get 60-70% of the dollar cost back out upon sale, so really nail down your comps, than you have basically a math problem if your rate on your primary goes up how long if ever before that extra payment is more than 400k in taxes, that’s just a simple calculation to help you decide, but I suspect you actually have a different question here, from a purely financial perspective my guess is the best option is to do anything to avoid that tax hit, but one of the reasons to make money is to spend it on things that you enjoy, based on your overall financial picture and a subjective view of how much enjoyment you will get out of a renovated home, you should decide if you want to roll your profit into another deal or “cash-out” your winnings, I love cars and I’m willing to spend more than is fiscally smart on them because they bring me joy, there is nothing wrong with that, but i don’t think it’s a fiscally smart choice, without knowing your exact property id imagine a renovation would fall into that category, so that’s the terms I would use to decide.