"Do not allow your losses to reach X percent of your income". 

Be nice to have a third person to go after for my bank client’s losses.

@Jake Brooks from our website, this is NOT a solicitation, only for information:A bad tenant can lead to thousands of dollars of losses via unpaid rents, legal fees and property damages.

That can be a big win, but also a big loss. 

I sold the farm at a loss and took my meager funds – about $400K – and moved to northern CA where our daughter and son-in-law were living.

I believe alot of owners in the area are under insured especially when it comes to loss of income and rebuild costs. 

So my question is do I sell and take a loss of 35-40k, try to long term rent at around $2000/ month and pray for appreciation?

Lenders will need to offset this risk with fees/interest rates so they recoup losses when those riskier borrowers default. while / because lenders can’t use medical costs to judge the credit worthiness of a borrower well, all loan costs will have to go up, to spread the risk peanut butter.

That said, you must also meet the coverage requirements, loss payee/mortgagee clauses, deductible requirements, etc..  

At a minimum, if you want to shelter W2 income you need to know the IRS rules regarding passive activity losses and the exceptions, and also about the largest tax sheltering deduction, which is cost segregation and bonus depreciation.