I was also buying mostly B grade properties in B grade areas that had good appreciation, and a good tenant pool...eventually, I had enough wealth built up that I could gradually begin improving my lifestyle (e.g.; occupying the nicest room in the place I was house hacking, then buying my own house, then buying a nicer house, etc.)...but, I was careful to avoid excess "lifestyle creep" --I didn't allow my increasing expenditures to out-pace my increasing income.Good luck out there!

@Phillip Rosin Hey Phillip, I'd suggest you come up with a hybrid strategy in which you are paying off consumer debt gradually, so more than you are paying today now and start investing in Real Estate alongside. 

A sudden and large rent increase may cause financial hardship for your tenants and may increase the risk of tenant turnover.One approach may be to raise rents gradually over time, rather than all at once, to minimize the impact on your tenants.

Also, I will be increase rent gradually over the next 18 months to reflect closer to market rental rates.Lessons learned?

The compression of inventory over the last 10 years has gradually restricted the discounts on the buying side.

It is more like paint in look but it does show wear a bit more obviously than normal wood stain that fades gradually.

Sounds like you'll probably have at least some light rehab to do anyway as you gradually clean out the place.Finally, thank you @Nicolas Franckenfeld and @Tom V. for basically saying that I'm unintelligent.

You will however be able to carry forward the "loss" until you either sell the property or earn less than 150k in a year (it's a gradual transition from 100k to 150k for the amount of rental loss you can claim against other income).So if you buy cash and are cashflowing like mad, there's a good chance your depreciation and expenses could still be deducted from the rental income and you still have cashflow earnings left over.  

They moved out because I raised the rent to $1200 (gradually).

This year alone we have seen a 55% increase gross income over last year (as we have gradually continued to increase our nightly rates and have maintained a high level of satisfaction and reviews).