Otherwise, the only tax that applies is income tax on withdrawals from a Traditional IRA. 

•Incoming Market Changes & Local News: Keep an eye on city regulations, new developments, and economic shifts that could impact STR demand.

The property is $400k and brings in about $40k in rental income without the residential unit. 

I have all the income and expenses.

Yes I often hear PPR and DLP in the same breath as they both seem to offer solid income with fairly low risk.

@Tony Schmucker Now that you know all of those markets work from a Macro perspective you should look to see where you want to live for 2-3 years and what your and your wife's income will be in those markets.

@Christopher HeidrichRecommend you first figure out the property Class you want to invest in, THEN figure out the corresponding location to invest in.Property Class will typically dictate the Class of tenant you get, which greatly IMPACTS rental income stability and property maintenance/damage by tenants.If you apply Class A assumptions to a Class B or C purchase, your expectations won’t be met and it may be a financial disaster.If you buy/renovate a property in Class D area to Class A standards, what quality of tenant will you get?

I'm a local real estate broker, investor, and manager (100+ rentals, mostly Airbnb/STR and multifamily).House hacking is a tried-and-true method and in Sacramento you can produce some meaningful income while enjoying the appreciation and tax benefits of owning real estate.

Typically, I run a current income/expense column next to a ProForma column to show potential value add opporunties.I agree with @Robert. 

I told the couple that I got an offer for $1,700 but wanted to ultimately rent to them but need the income.