Thank you so much @Greg O'Brien, I just bookmarked this thread, I stayed up until 2am last night trying to find answers to this, confused by different professional opinions and IRS publications.I'm trying to use STRs (rented out 7 days or less with no substantial services provided in which I materially participate) to reduce my W2 liabilities and my biggest concern was if doing this will trigger Self Employment taxes.If I understood correctly, in this situation I can use depreciation losses as active against other active income (which is what I want).

Financially, the numbers make sense, but I need to have a proper inspection since this is my first home (and I'm going unrepresented) and the house is built in 1915 with some renovations that were clearly done by the investor selling the property rather than a professional.Question: Although  previous owner has owned the property for 3 years and rented to tenants previously, should I be concerned that the legal zoning is only for SFH?

I've listed the criteria from the analysis I used from Policygenious (and here's the full article:https://www.policygenius.com/homeowners-insurance/best-and-w...)Drought is the biggest concern for AZ, along with high heat.

He wants us to install permanent heating in all the bedrooms which will cost alot of money that we don’t have.   

Also, anything can happen at any time so, you will need someone to handle any concerns/issues.

I was starting to get a little concerned, I always saw other people investing in this area which I knew came with its difficulties but as long as tenant screening and property checks out I know it would work.

A skilled property manager can ensure a positive tenant experience by responding promptly to maintenance requests, addressing concerns, and fostering good relationships.

Cash flow will be around 1200.00 before maintenance set-asides.Items of concern are getting to an ARV for appeal due to minor repairs, clean-up, and available cash required to acquire a new place to live.  1.

Don't be concerned about appreication after 1 year.

Just make sure you document everything properly, and once the property is in your LLC, it can operate as you described.As for your concern about taxes, keeping it under an LLC is a smart move for liability protection and managing income.