This helps keep me out of hot water with fairhousing. 

Here's a quick breakdown:Unforeseen Property Issues: Hidden damage, bad tenants, major repairs – these can eat into profits.Vacancy Woes: Empty units mean lost income, impacting cash flow.Market Downturns: Property values can drop, affecting your investment's performance. 

The idea of dropping money in an index fund and forgetting about it can seem like you are not doing anything. 

I also see your point about avoiding bargain basement properties, especially insofar as tax shielding is easier with an asset of a reasonable size.Your point about barriers to entry is also interesting, since I suppose those barriers can be geography (natural boundaries of mountains/water), but you're probably referring to that which impedes future construction?

With a STR you have to drop everything to deal with anything that may arise.

You also mentioned an unpaid water bill, so be sure to deduct any outstanding balance from that bill as well. 

Instead, shut off the water to the toilet and place a sign on the door "Art exhibit: Non-functioning bathroom."

The city required the road to be extended a few feet, along with water and sewer.

If they suspend/lose their license, they're dead in the water.

You need to pay your mortgage, car, electric, water, phone, etc.Now, here's where it gets super tricky, I guess, so I'll try to be as clear and concise as possible:DON'T TOUCH THE FIRST TWO.