Asbestos siding and lead based paint are both hot potatoes when it comes to regulations. 

The market is very hot right now in MA with very low inventory.

If you hold a property for a few decades and the area magically gentrifies into the next hot neighborhood, then great, but that's a miiiiighty big bet to make.

I am not advocating setting them uncomfortably low, but when they are not as hot, the tenant will run out of hot water a little faster which typically equates to shorter showers.  

One, it can land him in legal hot water.

Your hot water tank goes out and you will be happy you kept that $100 to cover random repairs and didn’t pay down the loan in the name of equity. 

After doing my own research I believe that my head is in the right place however, estimating property performance is not going too hot.

@Brian Ellis  My understanding is that in order to accept Section 8, your property has to pass inspection by the local housing administration, so yes, you do have to apply.I think that the key to staying out of hot water is to NEVER say "I don't accept Section 8".

Roof,floors,appliances, hot water heater,etc.

I think it's hot air, myself.