As a result, you might end up increasing your taxes by delaying income and accelerating deductions.Did I miss something?

But Metro Phoenix is a leader in rent increases.

They tell you to request to market, but there is a max allowable increase which is a joke.

I've already renovated one of the bathrooms, and I’m planning to paint the interior, update the kitchen cabinets, possibly sand the wood floors, build a fence is a corner lot and increase the rent for the room since my tenant is currently renting the entire 3-bedroom, 2-bathroom house for $800 a month.

By carefully timing their sales and purchases, they not only deferred taxes but also increased their cash flow significantly.

By accepting pets, it not only has it increased my cash flow per stay, but it has opened up my place for more bookings. 

If it's in your name you can look into the potential for a HELOC or potentially refinance to pull out some of the equity you've created, but you'll need to do the math to see if you're payments will increase based on the new loan terms.

Combine that with rates that are near high for this century.  3 things could solve this 1) RE prices fall (that would be bad for me) 2) rents increase a lot without RE prices increasing similarly (this would be bad for tenants) 3) rates fall a lot.  

If you can find properties where you can add value (adding units, increasing rents) then you can increase the value of the property, refi and get your money out. 

The goal is to cash flow so I will rehab the property and increase the rent.