As someone else mentioned, what I've seen a lot of in the past six months is deals that don't have the rental income to service the debt and borrowers with marginal credit.

Quote from @Jake Hughes: Called my CPA and they mentioned that aside from tax write offs we can do a cost segregation study on one of my properties.

As mentioned anyone can sue anyone for anything and curious what he would be sued for.

One thing I would mention though - doing STR just to save taxes often leaves you operationally unstable or too detached from the management to be successful.

I mention to them that I would be interested in their house if they ever think of selling it.

As you mentioned often they own the land/house next door. 

One mistake could extend the tenant's stay for months without any income, not to mention the stress it could cause.

Every system you try will have flaws, or you may salivate over a feature that appears in other software.Some familiar names are mentioned frequently: Stessa, Apartments.com, RentRedi, TenantCloud, Innago, RentManager, Avail, Rentec Direct, Doorloop, etc.I recommend conducting thorough research on each app online to understand their offerings, pricing, etc.

*Please note: As Dave mentioned, not all REITs allow for ongoing depreciation, but some do.

There's a ton of posts on this site mentioning the use of LLC's.