There is a little more risk, and it helps if you're in contact with the neighbors so they can alert you if there is anything out of the ordinary going on that you should know about.

Otherwise (for me) it's taxed as ordinary income.  

However, the association will usually take care of common grounds maintenance/landscaping and limited common elements like fencing and some porches or patios. 

For tax reasons, however, rental income for corporations is taxed as ordinary income rather than passive income.  

And unlike you, I don't need to spend my time complaining about the newbie wholesalers who suck at it either, or the gurus that always have and always will profit from ordinary people's dreams of what could be if they would actually do something about it.

Any amounts subject to depreciation recapture will be taxed at your ordinary income tax rate.

LTCGs have their own tax brackets, which are lower than ordinary income tax brackets, though they are still slightly progressive currently (they step up) based on the amount of ordinary income in a given year, so there may be some benefit if the seller will be in a lower ordinary income tax bracket in the future.Note that tax on the recapture of the depreciation that was taken during the life of the asset is due in the year of the installment sale.

Bi Fold Closet Door Broken – $70 Removed from track and missing hardwareGarage Shop Light Fixtures (3) Broken – $92Main Bath Exhaust Fan - $45Broken drawer front on wet bar - $35Broken drawer track and broken drawer front kitchen north wall - $55 This had been apparently pulled by the drawer face which separated the drawer at the corner as well as the face.Broken blinds in living room both east windows – $22Broken and missing blinds F/R sliding door window - $38Front Yard Landscape - $130 Trim overgrown evergreens and bushes, remove extensive goatheads which are not part of the rock front yard.Back Patio Clean Up - $25 Missing roof shingle replacement - $40 Replacement shingles were available in the garage.Back Yard Dog Clean Up – $120 Remove dog feces throughout the back yard including excessive amounts under the trees to the south of the property.

Pavers are going in this week, giving each unit a back yard private patio area.

On one hand, everyone has stretched further than the ordinary employee type and is seeking a better life.