This is a budget to account large expenses like an AC unit or a roof or a water heater - any large out of the ordinary expense that could catch you off guard - better to prepare for that before it happens.  

I tell you something out of ordinary!

If you owned for less than 1 year you will be taxed as ordinary income not capital gains

You get a deduction at your ordinary rate and return it at depreciation recapture rates.

ALSO- your a dealer in the eyes of the IRS... so your gains are taxable as ordinary income.

ThE amount of depreciation recapture will be treated as ordinary income.

$200K for a 3-2-1 triplex (66K per unit) will seem outlandish to most of our friends to the south, but it is not out of the ordinary in your neck of the woods (nor here in the Maritimes, unless you go to a small, rural town).

This exception let you use up to $25K of your NET rental tax loss to offset other ordinary income.  

@Pauline Misiak  Dividend payments made out by the REIT are taxed to the individual ordinary income, unless they are considered to be qualified dividends which are taxed as capital gains.  

I believe that it would be ordinary income, not capital gain, which makes it even worse.