First, most investors and owners of real estate related businesses are in one or more of the following situations1- they’re unable to duplicate their expertise that drives the ROI and they are at their personal max capacity as to time2- they’re obtaining high ROI by use of excessive leverage 3 - they’re obtaining high ROI by taking excessive risk4- they hit correct timing in the correct market, and this is not necessarily repeatable with any probabilityIn order for an investment or business to scale, we need the ROI (on a risk adjusted basis) to be sufficient to cover a PREMIUM risk adjusted return to passive investors; all expenses of managing the assets and the business, and a significant return to the “sponsor” providing compensation to him making the work, risk and time worth while. 

I was wondering will the insurance cover the cost or no because no police report?

@Mohit Gupta  depending on number of occupants your regular insurance can cover it, read the policy, ours covers two roomers. 

I guess that's part of my question, if you could have the security deposit cover that and people's experiences so I could better prepare myself. 

Since you only have 2 full time and two part time staff, who covers their vacations and sick time?   

STR management is 20-25% (I would recommend self managing or getting a VA), since income is higher you could probably get away with 5% for maintenance / cap ex but remember you need to cover utilities and cleaning for these units which drives up costs.

Thankfully, my wife is still working, and we have a few months’ worth of emergency funds to cover our expenses.

Umbrella Policies are good, but they are not an asset protection tool, they only cover litigation/damages after you’re already in litigation or found personally liable.

And eventually, it helps you buy more real estate (until when you start milking your portfolio to cover your living expenses).If cash flow is what you want, buy a business. 

Taking a small cut to cover transaction costs and operational expenses is standard in platforms facilitating financial agreements.