An old business associate once told me "There are two people in this world you make sure you pay...the IRS and your attorney."

What data source determines the property class?

However, to qualify, the property must be investment property (not a primary residence), and strict IRS timelines apply.

Every REI has a starting point, a build up phase, and an exit phase (this doesn't have to mean out of REI...it refers to cash).The key to determining this is based on an investment plan, and where the REI is in that plan. 

Quote from @Tyler Garza: Deal :Duplex Home2 beds / unit2 baths / unit3,000 sqftAsking 300k60k downEst rent/yr - 31,2005% Vacancy20% Op ExpenseMortgage 240k assuming 7%Results: CF - 6,600Cocr - 11%Cap - 8%Looking at this for a buy and hold and trying to determine if I am analyzing this right For the best rates, to get near the 7% on a 2-4 family you are going to need to put down 25% instead of 20%. 

It's easier to manage this property now that I sold the other one.I still have to see how much I will get hit by the IRS for 2024 (which is when I sold the other property)I have considered selling the one I have left (in 2026) but I would lose diversification because then I'd have 90% in the Stock market.

The loan is under my name, so the bank will send me - and the IRS!

Then you can determine if you made a profit, loss or broke even.Determining your sales price can only be determined by the market. 

So what you'll want to pay attention to is the total upfront costs and how that impacts your interest rate - I'd encourage you if your lender hasn't already to do a break-even calculation to determine based on your hold and strategy how much costs yield you a positive ROI. 

@Bobby Paquette really depends on the Class of the property, which is determined by tenant pool, location and condition.Class A: easy to manage remotelyClass B: more challengingClass C/D: should only be attempted by expertsIf you follow the STR lock strategy, you can install smartlocks and then program codes for each tenant's lease.