If you don’t have the time to devote overseeing your rental property, you should consider hiring a property manager before your profits diminish.

This law is defined as this: “The value of your services completely diminish as soon as your service has been provided.”

It, however, does not diminish that my RE rents are high compared to the purchase/rehab price and definitely cash flow. 

You already mentioned cash flow, and the only thing I'd add is that if you buy in a highly desirable area, then your cash flow on day one may be low, but with consistent rent increases over time could end up high ... this is VS buying in a bad area with high cash flow on day one, but those rents rarely go up to even keep up with inflation so your cash flow diminishes over time.Then there is appreciation.

Low interest rates, favourable exchange turn U.S. into hotspotEVEN FOR INVESTORS IN CENTRAL CANADA, WHERE THE METROPOLISES OFFER DIMINISHING RETURN ON INVESTMENTS, THE UNITED STATES OFFERS DENSELY-POPULATED MARKETS WITH STRONG FUNDAMENTALS AND NO SHORTAGE OF RENTAL DEMAND.All across Canada real estate prices continue to rise at an incredible rate making buying an investment property an increasingly difficult task.

Personally, and in my experience as a broker here in Denver, going above 650k for a house hack usually produces diminishing returns as they won't rent much better than the sub 650k category.

I planned on keeping it as a rental but the HOA continued to rise and would have diminished any cash flow. 

That's the "point of diminishing returns" there: once you pass 5 or 6 hundred grand price point, it becomes more lucrative and smarter to buy two small multi-unit properties (like two duplexes for $300k each as opposed to one big fourplex for $600k).

If the Leased Premises or any other party of the Building is damaged by fire or other casualty resulting from any act or negligence of Tenant or any of Tenant’s agents, employees or invitees, rent shall not be diminished or a bated while such damages are under repair, and Tenant shall be responsible for the costs of repair not covered by insurance.B.

The unit is in Los Angeles and it seems like landlord rights are diminishing.