Their taxes and insurance may have doubled and they can't afford the house any more.I think geographic is tough because there just isn't typically the turnover any more in most areas. 

*Renovation Costs – Includes labor, materials, permits, and unexpected repairs*Holding Costs — Utilities, property taxes, and financing costs during the renovation time.

You have tax benefits through depreciation and you are gaining experience via property management.  

@Kelly Taylor who doesn’t like tax free atm withdrawals?  

Tax implications?

--- Does the property have 2 Tax ID numbers or just one?

Capital Gains – Don't sell it if you have to pay tax on it.

Quote from @Terra Padgett: If I had $1M to invest in real estate, I would ______.Tax Free ?

This would end up getting you some tax benefits and extra cash flow that could help you leverage that into another property...maybe a 1031 exchange.

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.