Have you considered the added cost for this restriction?

2@Mary Chen, @Seo Hui Han I think your issues are going to be more with the lending than any 1031 restrictions. 

The number of bedrooms for STR has to match the number of bedrooms cited in the septic permit, so you are seeing homes with 7 BR now have a 10 person STR occupancy limit and some homes that had bedrooms added without permits now being restricted. 

A lot of cities in the OC don't allow STRs and the ones that do may restrict them in the near future.

Imposes liability on a tenant for any of the following:(a) Personal injury arising from causes clearly beyond the tenant's control.

HI Michael, I'm a huge fan of all things Colorado but I've heard STR restrictions have been tightening..AirDNA and local PM would be a good projection and analysis resource.

Purchase price: $49,000 Cash invested: $3,000 We purchased 5 acres with no deed restrictions or HOA and continue to build out rentals/lots on the property.

Investors/lenders can have overlays that are more restrictive, but generally can't waive this.

Some areas have conservation easements , you may cut a deal with the local government where if you put a restriction on the property to let it go natural they may pay you . 

Ultimately it is the owner's (your) responsibility to discover all this kind of stuff and make all the calls to the city/county, checking on any restrictions in place.