@David Chase First and foremost, I am not a CPA. What follows is just the real estate investors interpretation of taxes. As such I will keep it general, and avoid specific numbers. I would highly recommend reading, Real Estate Loopholes by Diane Kennedy and Garrett Sutton.
The biggest con I can think of is that rental income is taxed as ordinary income, and subject to your tax bracket. If you aren't careful, rental income can push you into another tax bracket. However, remember real estate is a business. When considering taxes, think about real estate in business terms.
Real Estate is an "asset heavy" business, meaning in order to produce income the business has to spend substantial capital to acquire and maintain PP&E (Plants, Property & Equipment), aka assets. Another asset heavy business is the airline industry. The IRS recognizes capital must be spent to maintain these assets, and allows for deductions for these expenses. Repairs, maintenance, mortgage interest and property taxes are examples of items that can be deductible. For the average SFR rental property, these can take 50% or more of the income.
Another advantage of real estate is depreciation. The IRS recognizes when an asset is purchased today, it decreases in value over time. This decrease in value is considered a loss, as it theoretically can never be recovered. A tax deduction is given to account for this loss. The IRS typically has schedules for depreciation, or timeframes in which the value of the asset goes to 0. For example, a single family house (which the IRS considers a piece of equipment, or asset) is depreciated over a 27.5 year schedule. Note: this does not include the value of the land. So, if you buy a property for $150,000, and it is determined the house on it is worth $100,000, you get to claim a loss of $3636 per year for 27.5 years. You can also depreciate capital improvements (kitchen upgrades, new roof, etc) on different schedules as well.
These two factors can add up to a substantial yearly tax deduction. In a lot of cases when depreciation comes in to play, the deductions total more than the net income the property generates. As such, its is possible to pay no income tax on rental income.
A final note, if the deductions on real estate exceed the income, it is possible to apply these deductions to other income as well, lowering the overall tax burden of the individual. This is a huge reason for many high income earners such as doctors and lawyers to invest in real estate. However, there are many rules and considerations for this to apply, so please consult an accountant.