Why wouldn't you want to defer, reduce or entirely eliminate any unrealized capital gains tax?

I suggest connecting with a local real estate agent who knows Baltimore and works regularly with investors and retail buyers to help you get a better handle on your needs and then guide you in the right direction.Good luck, welcome to the Baltimore market, and welcome to Bigger Pockets!  

It sounds from your description that it is.However, because you also do personal activities in the room (play games on your desktop), it doesn't sound like this would pass the "exclusive use" rule.Playing the games on your laptop in a different room would likely qualify the room as "exclusive use" as a home office.Also note that in the future if you take this deduction, there is a simplified method you can use to reduce the records you have to keep - just multiply the square footage of the office by $5 (if it is under 300 total square feet).

I might do it but it would reduce the value if you plan to sell it soon. 

This would reduce my competitiveness in the offer.

Otherwise, I reduce the leverage.Hope that helps.

This reduces costs and anxiety. 

Then, once each rental is done this way and applied to income or debt, they are going calculate your DTI and qualify or deny you based on the DTI requirements of that particular loan program (28%, 30%, 35%, 40%, 60+% back in 2005, whatever).The above underwriting method is know as "washing" the debt of each rental property with its income.Another way that they do it is they simply take the PITI of each property straight to the debt, and the rental income from each property straight to the income (usually also reduced to 75%); rather than washing it first.It is advantageous to the borrower's qualifications to "wash" the PITI with the rental income and then apply the remainder, whether positive or negative, to income or debt. 

See if there is upside to push the rents, reduce ongoing costs, and also check on value of land.

It’s very unlikely to have been related to the home’s systems, since it’s a brand-new house.I believe I have a handle on how to proceed, but I’d appreciate any advice on how to handle security deposits with regard to cause, and tips on dealing with insurance.