It's not really that complicated to buy out of state.

This is far more complicated than regular depreciation, and I highly recommend you get help from someone who has done it before.

Unless you have the very complicated HUD spreadsheet for utility projections, there is no way you can know what amount HUD will be paying for rent vs. the tenant. 

Of course, OOS investing always ads another level of risk/complication, in that you can't just drive by and make sure your property is being maintained, etc.

@Ram Batchu it complicates issues and I wouldn't allow it.

The main point is that houses are complicated systems, and only experience and practice will help you catch things.

@Alex KnightGenerally no, cap gains and dividend income are portfolio income, not passive income.There is an exception if you invested in an investment partnership, and the investment partnership is in the trade or business of trading, not merely investing.This gets a little complicated and I would advise you to consult your tax advisor if you think you might fit the fact pattern.

Not trying to over complicate the question, sorry if I did.Thanks in advance.

Most landlords should stay away from electrical if it is anything more complicated than a light fixture. 

However, it's quite complicated and our heads are still spinning.