If your leasing application process is thorough and well thought out, and if your lease agreement has been well drafted by your local attorney and if it includes clauses that permit you/your property manager enough latitude to maneuver and anticipate undesirable tenant behaviors, both actions and inactions, and you have operational processes which align with enforcement of your lease, then you've done all you can do to reduce this inherent risk of an undesirable tenant.  

But it seems to my simple way of thinking isn't that *also* going to reduce your monthly benefits to a large percent?

Quote from @Kevin Robert Highgate: The ability to invest in property and replace your W2 income quickly is tough.

So, it would then potentially cost you a penalty for early withdrawl and also income tax owed on it.

They track management income, expenses, vendor payments, etc.

Many PMs ask for this in their agreements to reduce their own liability exposure.

Remember that the leveraged purchases are not going to add significant cash flow immediately and borrowing against existing properties will also reduce their cash flow.

Having a group of friends living in an apartment complex creates a sense of community and reduces turnover.

Who gets to decide if a repair that appears to be needed is real or fictious, created to reduce the net available to the lender? 

For every day after the 30-days, the permit fee is reduced by 10% of the permit fee.