I say this verbally before they apply.

@Chiane Martin Where did you apply for your HELOC on your property? 

Consult a tax professional to optimize deductions and explore strategies like Real Estate Professional Status or short-term rental loopholes to apply depreciation to non-passive income.This post does not create a CPA-Client relationship.

However, there is no way to do so without risk.The Internal Revenue Services issues three (3) Private Letter Rulings (PLRs) that allowed the taxpayers to do just this.

Its hard to reach the 1% rule here now. 

Sometimes the tenant just doesn't know about them or their situation limits their ability to apply.

Is it not so much the fee for filing that makes it prohibitive but that the equity offered rules out the viability of being a GP in a registered security this way? 

Too many rules.

It's mostly Class A properties, a few Class B.You may find the below copy & paste info useful in addressing your question:----------------------------------------------------------------------------------Recommend you first figure out the property Class you want to invest in, THEN figure out the corresponding location to invest in.Property Class will typically dictate the Class of tenant you get, which greatly IMPACTS rental income stability and property maintenance/damage by tenants.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.If you buy/renovate a property in Class D area to Class A standards, what quality of tenant will you get?

I made that mistake with a 2 bedroom condo - after 1 year, I had to shut down operations due to HOA rule violations of NO short-term rentals less than 30 days.#8 The 30 day+ rule -  Certain places Airbnb is outlawed or a softer rule is the 30day+ rule.