If a tenant causes a claim, why should the landlord's insurance pay - possibly resulting in an increase in premium or even a cancellation of the policy?

Materials have increased more than 20% in the last 5-8 years.

However, a full or partial gift means you inherit their $33K cost basis, potentially increasing your capital gains taxes when you sell in the future.

It would actually be a net PROFIT given the huge increase to tax revenues. 

But once I got the bills, I increased the rent with the tenant's approval and signed an addendum to the lease stating the rent increase would be X and the owner would take over utilities.

I think it will increase down the road, but right now the town is a bit on the past.

This would increase the benefit to where the fee would not be so outrageous that it would hinder the investment.

Keep in mind, adding "cute", and upgrading things won't increase your rent or ARV past what the market in that area will tell you is the max. 

Just make sure you are saving towards those slow months during the peak months, buy a deal at the right price (don't overpay just because its a turnkey STR or you think it will make more money than projected), and look into ways to increase bookings during those slow months with some marketing and operation tweaks. 

Also, hyperfocus helps me find a home with the right conditions - a stable but increasing-value neighborhood.