One thing you are missing though is if a property manager does things right, the repair mark up will wash out.

What kind of return was he going to get on his $1500?

If you don’t do the 1031 I’d say it’s a wash.

If he did, it would be interesting to know what that amount was. He

So the "average down" argument is a wash, one can do the same in either.

Of course, then there are the easy cases, like when I called the last landlord for this guy who shouldn't be living in my rental, and his first statement was "he was full of horses**t."

The best it can do is wash out your current payments from the DTI calc. 

The sale was not triggered by the urine, but after washing the carpet it is somewhat apparent it had been urinated on, while the carpet was damp the smell got very strong.

This would work for many different business models that have an owners quarters such as some storage facilities or car washes.

The laundry room is small and just has one wash one dryer and the hot water heater.