It shouldn't be complicated.

Renting to a friend can complicate things, especially if you're starting below market rent.

It's complicated.

The rules are more complicated than your one sentence, and even Tom did not have the time to explain all of them on his podcast. 500 hours is one way to qualify for material  participation, and there are other ways.

Most investors on this forum are obtuse to the complicated nature of macroeconomics, cause and effect.

Unfortunately, it's now going to get more complicated:(There are two types of approaches PMCs use to bill for maintenance:1) In-house ServiceTechs on the payroll, so owners are billed for their time by the hour.While the labor charges above are useful, they don't cover the true costs a PMC incurs, like:- Payroll costs for FICA, Social Security, Medicare, etc. that typically add 25-40% to the hourly rate- Medical insurance costs for the worker- Payroll processing costs to handle all of the above- Liability insurance costs in case worker damages something or injures someone- Workman's Compensation insurance- Costs of vehicles and tools- and more...Typically the management contract will disclose the total hourly rate an owner will be charged.

Reverse 1031 Exchanges are more complicated and have higher costs, but can solve these problems. 

Is that process too complicated, yes, but there is nothing in this decision that will prevent a tax sale purchaser in MD from reselling at a profit after obtaining the property by foreclosing the right of redemption.

There are more complicated strategies to maximize larger listings that involve having like multiple listings for same property and do individual room rentals when it is slower and then for larger length stays, larger groups, and more desirable dates you'd book the whole space, but I think its easier to just do two separate. 

Don't make it more complicated than it has to be.