You'll get pretty good depreciation when it comes time to do the taxes.

It'll be important to know how much taxes you're gonna be paying when you sell it.

First off to be clear when using income for these screening purposes its GROSS income (before taxes).

I highly recommend you study this, practice it, and apply it.https://www.biggerpockets.com/blog/rental-property-cash-flow...Property Details:Type: Single-family homePurchase Price: $289,900Down Payment: 20% ($57,980)Loan Amount: $231,920Interest Rate: 6.85%Loan Term: 30 yearsMonthly Mortgage Payment:Using a mortgage calculator, your principal and interest will cost $1,515 per monthRental Income:Average Rent for Single-Family Home: $2,171 per monthOperating Expenses:Property Taxes: $300 per monthInsurance: $100 per monthMaintenance and Repairs: Budgeting 5% of rental income ($109 per month)Vacancy Rate: Assuming 5% vacancy ($109 per month)Property Management Fees: If outsourced, typically 10% of rental income ($217 per month)Total Monthly Expenses:Operating Expenses: $835Mortgage Payment: $1,515Total Expenses: $2,350Net Monthly Cash Flow:Rental Income: $2,171Total Expenses: $2,350Net Cash Flow: -$179 per monthConclusion:In this scenario, the rental income of $2,171 per month does not fully cover the total monthly expenses of $2,350, resulting in a negative cash flow of $179.

I'd speak with your accountant about the potential tax consequences.

However: there are, of course, a wide range of legal regulations and tax implications.

If he keeps the title as is then the County may claw back the transfer taxes in the future plus a penalty. 

Instead, it could impact your cost basis in the property, which would affect depreciation and future tax calculations.

He's a CPA with a focus on strategic tax planning.

The home burns and the incredibly over taxed CA FAIR plan has either gone bankrupt or takes years to pay out.2.