A successful rental property should offer positive cash flow, meaning your rental income should exceed your monthly expenses (mortgage, taxes, insurance, maintenance, etc.).To find the right tenants, ensure the property is priced competitively within the local rental market.

I have had investors pull equity from their homes in the phoenix area to buy cash flowing properties in Fayetteville and similar areas, because the price growth in the phoenix area generates amazing returns.It depends on if you want cashflow now or delayed gratification later.Keep in mind that when you do sell, there are costs to selling and depreciation recapture  and IRS taxes, which eat up most of your "equity" growth. 

The Annual Owner Statement should break down all the expenses that the owner's tax professional then figures out how to deduct and on what tax schedule.So that way the owner can expense everything throughout the year?   

As you alluded to, sometimes a passive note investment purchased for monthly payments “goes south”, and becomes an active participation investment, with plenty of additional capital required for legal fees, forced place insurance, and property taxes.  

I have over a hundred rental units I own and operate in Utah everything from homes and condos to larger multifamily.Salt Lake County has higher property taxes and is basically built out already and Ogden even though you can find good opportunities in the long run it won't be able to compete with South Utah County or Eagle Mountain. 

Our team along with clients all are heavily investing in the area, and it is a strong place to start. close proximity to New York and New Jersey, paired with extremely affordable property/taxes and high rental demand make it on most people's radar.  

 WE  do both  give me a call and I can explain but depends on where the tax advantage is

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.

Bonus depreciation will finally be phased out in the 2027 tax year This is well said

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.