Truth is 99% of real estate in LA is absolute garbage, and the prices cannot be pushed up forever on obsolete junk houses.  

Some smaller commercial buildings have buildings / build-outs that are obsolete and hard to rent out. 

If the carpet is more than 5 years old, however, you may have trouble keeping any damages if they contest it as it's likely considered obsolete. 

Regarding it lasting for 3 years, do you mean that by the end of that period it will be out of date/obsolete as compared to newer versions?

The part I was most unclear on, was the income threshold that made the deductions obsolete.

@James Wise - fair point but as the market advances, their 8% - 10% plus aggressive placement fees, renewal fees, vacancy fees, the list goes on will have to come down or the likes of Hemlane.com and Buildium will begin to expand their service offering and make the "on the ground people" obsolete just like roofstock is doing to zillow and redfin or internet banking did to banks.

1) Mortgage2) Mortgage insurance (PMI or MIP) or FHA Risk base3) Property Taxes4) City Taxes5) HOA (Home Owner’s Association) Dues and Fees and Assessments6) Insurance   a) Property Hazard Insurance   b) Flood Insurance   c) Earthquake Insurance   d) Umbrella Insurance7) Vacancy Rate (usually 8% - the equivalent to one month a year, or 5-6% if multifamily and/or if experienced, if not use 8%)8) Utilities (you’ll have these if your tenant is not covering them and/or during vacancy)   a) Water § Sewer § Garbage   b) Electricity   c) Natural Gas   d) Propane9) General Maintenance (usually 5%)   a) Upkeep § Landscaping   b) Snow removal   c) Repairs   d) New Appliances10) Capital Expenditures (usually 5%, higher is the property is old and obsolete, less if fully rehabbed and all mechanicals and roof are new)11) Property Management (8%, even if you self manage, your time still has value and there might be a time when you'll want to be completely hands off or you'll not be able to do it, vacation, retirement, etc.), including...  

And make sure to account for the following expenses (if it applies):1) Mortgage2) Mortgage insurance (PMI or MIP) or FHA Risk base3) Property Taxes4) City Taxes5) HOA (Home Owner’s Association) Dues and Fees and Assessments6) Insurance   a) Property Hazard Insurance   b) Flood Insurance   c) Earthquake Insurance   d) Umbrella Insurance7) Vacancy Rate (usually 8% - the equivalent to one month a year, or 5-6% if multifamily and/or if experienced, if not use 8%)8) Utilities (you’ll have these if your tenant is not covering them and/or during vacancy)   a) Water § Sewer § Garbage   b) Electricity   c) Natural Gas   d) Propane9) General Maintenance (usually 5%)   a) Upkeep § Landscaping   b) Snow removal   c) Repairs   d) New Appliances10) Capital Expenditures (usually 5%, higher is the property is old and obsolete, less if fully rehabbed and all mechanicals and roof are new)11) Property Management (8%, even if you self manage, your time still has value and there might be a time when you'll want to be completely hands off or you'll not be able to do it, vacation, retirement, etc.), including...  

Un-grounded outlets are functionally obsolete, and will cause trouble even if your city's rental ordinances do not require updated wiring (something you should check on right away, BTW.)

So instead of a potential investment, it's more like buying a new car, guaranteed to be worth less than what you paid and likely obsolete in a much shorter time than you expected.