Less to manage as most times you won't be billing back the utility bill as normal usage is factored into the bill BUT the tenant is accountable for excess usage protecting you from abuse of the utilities. 

Depending on your definition of house hack, these excess losses may be able to be carried forward as passive losses on form 8582 (not enough information to determine this part, would need additional info).I will mention as well that if you choose to switch to another accountant who more specializes in real estate, being that it's April, any good CPA will automatically want you to file an extension.

California charges a minimum tax of $800 a year per LLC, and more if you have gross receipts in excess of $250k.

Excess business losses are capped for single individuals at $250,000 and for married individuals at $500,000, with any surplus being suspended and carried forward.

Excess business losses are capped for single individuals at $250,000 and for married individuals at $500,000, with any surplus being suspended and carried forward.

Also, thanks Steve, I'm glad some people agree with this required license being too excessive.

I live near Chicago, so we get all 4 seasons and a ton of moisture. 

California charges a minimum tax of $800 a year per LLC, and more if you have gross receipts in excess of $250k.

I talk to our local Section 8 office frequently as a property manager and in the begin they made it VERY CLEAR that the minimums are to protect the landlord AND the tenant.Most likely, the tenants are not going to have excess cash flow or savings to cover any of the damage to your "upgrades". 

You can invest excess cash flow and get 5% return (online savings, CDs, treasuries) (or simply pay down principal).