@Kevin Riven because in Phase 1 you can get decent deals and lending is plentiful, in Phase 2 the properties you own or will purchase are about to increase steadily in value, in Phase 3 the properties you own or are about to purchase might decrease steadily in value, and in Phase 4 the properties you wish you could purchase will be very difficult to acquire since lending is almost non-existent.

It's a goal that never ends, unlike having a set $ # goal.It treats increasing assets & decreasing debts more equally & it's not overly aggressive which could encourage over leveraging & return chasing.I know hitting this goal at a minimum, when dealing with large numbers, over 20-30-40 years will get me well past a defined/limited FI number needed for "standard" retirement. 

I want to calculate IRR while also factoring in the decreased return that will kick in about a year or so because of capital gains. 

HI All - I'm considering a post office purchase. The early year cap rate looks good, but there are problems in the out years. The tenant has three five-year options on the lease that are $16k lower than the first thre...

Purchasing an investment property increases the level of difficulty of your tax return.Purchasing a house-hack is even more difficult.To make it even more difficult - you plan to make improvements so you have to determine which costs are currently expensed and which are capitalized.Not only have you acquired an investment property but you also acquired a personal residence.As a result, direct expenses towards your investment property and indirect expenses are deductible business expenses that can be used to decrease your net income from rental activities.With all that is said - you are trying to operate a business so I would hire professionals to help you with your tasks.

@Jung Won Kim the IRS' meaning of depreciation is based on the purchase price, and date of purchase (placed in service date).Even though it is based on the concept that the value of something decreases with time, the tax definition of depreciation is very different than the bank's definition of depreciation of appraised value.

That said, I believe that the profitability of short term rentals will continue to decrease until maybe only the industry heavy weights or the owner occupants can stay afloat. 

I feel prices are so macro in the city that just by decreasing some vacant properties on a single street can have huge effect.

In order to increase cashflow, you need to increase income and/or decrease expenses.

That being said, our population is not increasing; it is decreasing overall.