Most important of all: A deal that provides a high risk adjusted return with a well thought out plan for acquisition, management, and disposition. 

There are some key limitations that are important:Passive losses can only offset passive income.Up to $25,000 in passive rental losses may be deducted against non-passive income if the investor actively participates and their modified adjusted gross income is below $100,000.Unused passive losses are carried forward to future tax years.Here’s an IRS article that further discusses the rules: https://www.irs.gov/publications/p9251031 ExchangesThis strategy allows investors to defer capital gains tax when they sell a property if they invest the sale proceeds into a “like-kind” property.

Our strategy has evolved as markets and conditions have changed as well as our own place in life and we constantly check ourselves and make adjustments.

The past few years have shown us that relying on historical data without adjusting for current and projected trends can lead to significant shortfalls in underwriting.

Pete is tough.First, I would adjust your mindset.

If you do calculate make sure you add a adjustment after you file the tax return if needed.Can you do budgets, forecast? 

In that case, a premium can help discourage back-to-back bookings or at least bring in more revenue that could help with operational costs....While a premiumcan be put in place so that adjacent days are less attractive to guests, there's no guarantee that guests won't book these days, and your regular listing maximum price will still be in effect (though that can be adjusted with Date Specific Overrides).

They were quick to pay when repairs had to be done and their in-house adjusters were on point.  

I'd love to hear about your experiences and see whether my expectations just needs to be adjusted.

Just because you don't make any money on them, doesn't mean you aren't responsible, along with the source of the actual plans, for any mistakes in the plans, or even any mistakes in construction from lack of info, misunderstanding, or just plain stupidity of the builder/user of the plans.The licensing agreement will have guidance on having plans adjusted for local code, reviewed by architect/engineer etc.