Feel free to dumb this down for me, I want to learn and have had this goal for a long time. 

Does this strategy make sense, or am I overlooking any potential pitfalls?

Quote from @Melanie Baldridge: In 2025 the bonus depreciation rate is 40%.This means that if you bought a property for $1M in 2025, did a cost seg study and found $300K in eligible assets that you could depreciate, you could take 40% of that $300K as bonus depreciation to offset your income in the first year.40% of $300K = $120K.You then apply that $120K to the owner’s personal tax rate to find the final amount that they can defer in year 1.If your tax rate is 37%, you can defer $66.6K.This is a big deal even at the 40% bonus depreciation rate this year.It’s a massive benefit 

Hope this helps, and good luck with your next deal!

Figure rates are significantly higher doing this instead of the more straight forward approach.  

This may lead to some longer bookings further out with your 3 bd listing.

What made you interested in investing in this type of deal?

You may just want to put 3% down on your next place and rent out this one.

This can complicate claims payments for the named insured/tenant. 

This is more about inventory and not STR returns.