This is the most obvious loophole.

Say you start a STR and use the loophole to write off 100k from W2 salary. 2 yrs later the rental goes underwater and you have to give it up at huge loss.  

And because Puerto Rico uses the U.S. dollar, there is minimal currency risk.Tax incentives:In 2012, Puerto Rico introduced a series of tax loopholes to lure investors and businesses.

The procedural changes are actually minor and loopholes and work-arounds are definitely possible.

Most people know about the STR RE professional loophole.  

I enjoy helping new investors learn the new programs and loopholes.

@Sandeep Jain if you would like to do some reading around some of the asset protection issues I would recommend Garrett Sutton's Loopholes of Real Estate or Mauricio Rauld's Legal Strategies for Everyone.

This almost seems like a loophole, that I could buy a house which had multiple rooms per unit.

I live in Sarasota County (outside of Sarasota City), FL and trying to understand the rules, regulations and loopholes with STR properties.

You eliminate the STR loophole which allows adjusted material participation qualifications