.- Rents staying flat while property taxes and insurance increase.- Unexpected expenses that eat into profits.For example, some investors who bought in 2022 at high interest rates expected strong rent growth to cover costs.

I bought it last year and thus far have: 1) Appealed assessed value to bring down taxes, 2) Got better (less expensive) insurance, 2) Rehabbed 3/4 units, and 3) increased rents $300-$400 per unit along the way.

I've been buried with tax preparation and a couple projects, so BP moved from the back burner to completely off the stove!

Overall, the tax benefits and appreciation alone keep me interested in staying with it more than the cash flow itself. 

If your bottom line numbers on tax returns and W2 income are not strong however, this will be an abrupt dead end.

This creates two loan payments ($100,000 of equity and $300,000 on the new mortgage).Key NumbersHome Equity Loan Interest Rate: 6%Mortgage Interest Rate: 7%Rental Income: $3,000 per monthExpenses (management, taxes, insurance, maintenance): $800 per monthIncome and ExpensesMonthly Rental Income: $3,000Monthly Expenses: $800Monthly Mortgage Payment: $2,000ExplanationThe investor earns $3,000 in rent each month.They pay $2,000 on the investment property mortgage and $800 on other expenses.This leaves $200 profit each month or $2,400 per year.However, you have to pay $6,000 interest on the equity borrowed.This leaves you with an annual loss of $3,600.While the rental property generates positive monthly income, the interest cost of borrowing the initial $100,000 results in an overall loss.

I have a confession: my only duplex, which I gave owned now for 2 years and recently moved out of from a house hack, has proven to cost me more to maintain/pay taxes/repair/fix etc to the point where my cash flow is close to zero.

Not that I'm a proponent of borrowing just for a tax break, but the interest is a deductible expense. 

We have sold (tax free), kept as long term and/or short term rentals as well.

I could also see 15% corp tax and the whole no tax on tips thing.