Tonight my tenant calls in a panic - tree has come down barely missing the house but taking down the power line and ripping it from the side of the house.

At least the rent is barely covering the 1% interest payment for the hard money loan.

Stick to the lease..... if its specifically states its the tenant responsibility, then that's what it is....if you ignore the lease, then you might as well not have one.If they want monthly service then fine... the rent is now increased by that amount.If the tenant did the service without consulting and arranging the cost with you prior, then its on them....end of story.Unless you are deadly afraid of having a vacancy, then stick to the lease and run your BUSINESS......If you just cant bare to be that tough, then pay the one time service and make it 1000x clear that it will not be done again and NO 'after the fact" reimbursements will EVER be done again....be prepared to deal with more tenant "demands" if you cave

Rocks, cacti, mesquite etc last forever with barely any water.

At a bare minimum with any property, there should always be a thorough inspection done.

Hate to be a party-pooper, but in some jurisdictions it's illegal to profit from charging your tenants for utilities, so tread with care if you implement a system in which you pay less to the utilities than you charge your tenants.Check with your PM or your lawyer, etc.Of course if you're just billing back to the tenants what you pay, there's nothing wrong with that, and as other have already said, it's a pretty fair and efficient system so long as the market will bare it.James

At a bare minimum you should be raising the rent annually to match your annual cost of living index.

Probably the norm is that you are just barely cash flowing or breaking even when you have 20% down with a 30 year fixed Mortgage.I normally buy at 20% down, break even on the cash flow, and then years later make a LOT of money on appreciation on both Rent and Value.In fact, I'm in Contract to buy a 3 Family not too close to Barclay's but close enough to walk there in 15 minutes.Generally, in my opinion, if you are doing Buy and Hold in a hot area like Brooklyn near Barclays, you should be doing it with a 30 year fixed Mortgage so that you can have a consistent Debt Service Payment.

I've also done the analysis on some of the houses and I barely break even.The problems come at that step.

@Mark Elkins  apples and oranges as it relates to HML and a conventional loan your not going to keep a HML at bay unless you file a BK.. one reason HML do not ( generally make owner Occ loans) these are commercial.. so that tactic of hiring a lawyer and claiming mortgage inaccuracies is not going to work most of the time if at all.your talking about the deep recession times 10 years ago and there were many deals to be had but in todays market .. not so much.HML in todays space are pretty sharp pretty competitive and generally were not making loans in the same manner they did 10 years ago.Only way a first position lender here takes a cram down is if the trustor  did so much damage to the property that the property is not worth the 300k they are owed.. and bare land as you know in those areas is easily worth that in most cases.