At your income rate your rental income could be tax free but not deductible against your regular income. 

We locked in our first guest for $2,600/month, so that is already more than the previous LTR rates combined.

Rates are usually better with LLCs, and given the liability protection, LLCs are probably a better choice.

Given these reasons, I'm assuming all improvements and spending should be deductible at the pro-rated amount. 

I am also wondering about vacancy rates in general in the Memphis area.

I could put a mortgage on the property, I was quoted 60% LTV with 8% rate amortized over 15 years.

Hey @Yelena Korshak, well I am not an expert on AirBNB's way of ranking and rating.

Domicile: WA State (income tax free)Property location (Texas): (income tax free)LT gains + Depreciation recapture ~ $300k on a $500k income property ~effective / average tax rate = 12% for past umpteen yrs (relatively low income, avoiding IRMAA and doing Roth rolls (no 'realized' income, just transferring from tIRA to Roth = vast majority of annual MAGI income)In the end (coming soon, ~17 yrs) ALL remaining estate will go to charities / Charitable Foundation / DAF.

Rate caps are around 5-6 for 4-plexes in decent areas. 

I agree.I don't think the golf simulator will guarantee you extra income, bit the ADU would get rate extra cash.