I could be wrong.What you tell contractors is: if you do not separate labor from materials, then I have to report my ENTIRE payment, L&M, to the IRS as your income, and then it will be up to you to deduct materials from that income on your end. 

It's usually someone with a high W2 income buying a primary then doing Mid-Term or Short-Term Rentals with an ADU. 

Regardless, you might find the copy & paste info below helpful:)--------------------------------------------------------------------------------------------------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?

To collect all rents and other income from the Property and promptly and directly deposit suchrents in XXXX's Pooled Trust Account.3. 

Another option is investing in real estate through partnerships or fractional ownership, focusing on properties that yield cash flow or appreciation potential.For long-term growth, consider diversifying into assets such as private equity, tax liens, or even certain types of real estate that offer both capital appreciation and income potential over time.

You also don't have to pay state tax on income. 

We saw huge appreciation in the 2018-2022 inflation run up, but that has significantly slowed these days in my opinion.From a rental perspective your monthly income per unit after all expenses with a typical 20% down payment is likely $100-300 when you find a property that will cash flow.

Yes @Akash Sky that is considered ordinary income

Here are a few tips to help you get started:Financing: Since you’ll be starting your internship soon, lenders may look at your projected income or require a co-signer until you have a longer work history.

From experience, I’d recommend getting pre-approved, improving your debt-to-income ratio if needed, and researching local assistance programs.