If you can concretely state what risk you are trying to mitigate, I think the if, when, where, and how of diversification becomes self-evident?

Wetland Mitigation Bank.

You mitigate that with the underlying collateral.

Others are mitigating this risk by renting apartments, then putting them out as Short Term Rentals.

It's those maniacs that buy homes cash via quit claim deed off of craigslist that really get screwed.Make sure your property manager is a licensed real estate brokerage.Understand you can not eliminate all risk, only mitigate it.

All of the foregoing should help mitigate your risk.A "co-investing" partner could work. 

To me, the metering issue is somewhat mitigated by the fact that we're planning to bake an additional $25-$40 into the monthly rent.

I think you're right in that you need to mitigate this risk.

It's those maniacs that buy homes cash via quit claim deed off of craigslist that really get screwed.Make sure your property manager is a licensed real estate brokerage.Understand you can not eliminate all risk, only mitigate it.

But, naturally, you would try to mitigate these risks with different strategies which is exactly what you would do in the stock market.Consider both a “piece” of your financial plan if you do choose to include both.