And our policies include loss of rental income while the structure is out of service.

And in my experience the delayed (larger) increase is more likely to cause a loss of tenant than a smaller one.I used to use the change in the consumer price index as a minimum for my increases, sometimes adjusted up from that if insurance or taxes had taken a big hit.all cash

Passive income is subject to INCOME tax, NOT social security/medicare.Passive income has limitations on the amount of losses that can be offset against, (although I think there are some income limitiations).Many people mistake the "connotation" of the word passive with the IRS definition of "passive income".

An extra 2k or 3k is only another $10 to $15 a month....... versus the loss of another $300 to $400 a month profit.Congratulations on your new deal.

If one buys and sells homes using their personal names, and say there is a profit of $50K on house 1, and a loss of $20K on house 2, can we offset them and just  pay tax on the net of $30K?

Majority of the capital from China investors are locked or loss in the market and you have already started seeing Chinese investors back away from large high priced homes.

Hire a professional.If you are reading this post view your Profit and Loss and Balance Sheet and see if:- Can you file your tax return today?

I currently lose about $150/month on it and while that seems bad, my tenants have been paying down over $8000/year in principal on the unit and I'm able to depreciate the value of the unit and my paper losses against my other, better performing rental properties, so while it's not ideal, it's not a complete loser.

If I really have to choose, will choose compounding rate of return.That said, I will measure my success based on what I know at the time of purchase (Termed is as "Skill-Based PnL", Profit and Loss).Like @J Scott and many others said, you can't really predict the future.  

A loss of asset value is merely a paper loss unless you have to sell.