From talking to locals, there's a couple of issues than need to be addressed, some are the non-ecological practices that some of those developers have, unfortunately, our government profits from this investors and allows them to destroy manglers (which are the natural water purifying system of that area) dismantling hectares of mangroves and degraded the habitat of resident and migratory species burying animals alive.There's proof of fecal material floating beneath the city of Tulum, only 20% of the water is sent to the water treatment plant, there's no infrastructure for the exponential growth.The landfills in the middle of the jungle that is leaking hazardous pollutants into the freshwater system and that something that developers won't tell you.I love my country and it would be a disaster for everybody if this place ends up like some other great beaches around the world, that are completely ruined by greedy investors not following the rules.There's no urban or comprehensive master plan, and one of the risks is that Tulum will be like Playa del Carmen is today, overgrown and with environmental devastation.I will advise doing a lot of research before getting something in Tulum, different country, different rules, and practices.

Certainly not afraid of it -- the government red tape is Partly a question and difficulty removing a bad tenant is probably he biggest downside - that goes for any property though.   

The 1031 will let you get there using the tax dollars for your benefit rather than paying them to the government - a big bump to your net return.

Can you go ahead and change that (think address of record for LLCs or bills for other properties).Make sure any HOA and the local government allows for your home as an MTR.1 last point to add to Jamie's first point: if you can, take a video tour of the home and what you're leaving behind.

I only sold a few amount of properties but the values of the homes have increased.The government is making less affordable homes(Impacts supply)A lot of the points you suggested such as selling costs and having to rehab the property before sale apply to both cheap homes and expensive homes

It just seemed like a good strategy since these were government backed rental payments

Hence the scariest word's in the English language; "I'm from the Government, and I'm here to help".... 

If I do this, will IRS (or any other government entity) start looking at me and wondering what's going on?

Government AgenciesGovernment agencies can also foreclose on properties.

A few things to keep in mind:Section 8 requires the property to pass an inspection based on HUD’s Housing Quality Standards (basically making sure it’s safe and well-maintained).The rent you charge has to align with Fair Market Rents (FMRs) in your area, so it’s good to check what similar properties are renting for.You’ll still be responsible for maintaining the property, but the upside is that a chunk of the rent is guaranteed by the government, which can provide steady income.Check with the local housing authority about any specifics for your area—every jurisdiction does things a little differently.This could be a great niche if you can find a good deal on the land and make sure your expenses (like maintenance, insurance, and occasional vacancies) are covered by the rental income.