This includes verifying income stability, rental history, and conducting background checks as permitted by law.

In my opinion, and I looked deep into this issue, the IRS position is not supported by the actual law.

It was an illegal 3 family (legal single family with an in law) with a random other unit.

@Matthew Wright know your landlord tenant laws as many states have or are enacting limits on application fees, some require itemizing and returning any unused portions if over a certain amount.

I run the FB group Philadelphia Landlords Connect -2000+ small investors who have a variety of experiences that they share and help each other to find good contractors, navigate city laws... 

The stats can easily show a high occupancy rate if it's an under served community - which makes sense if there's laws against it.  

But you will need to know the laws.

Wisconsin landlord tenant law has been pretty reasonable, but we just had a major shift with the Koble case.

In 2024, savvy real estate investors should really tune into tax strategies that not only boost their profits but also keep them on the right side of the law.

On top of that, you get great appreciation and very landlord friendly laws.