The only thing is my property taxes go up with no limit with the increase in property values, 17% the last assessment.

Many policies only provide a limited amount of Pollution converge so discuss this with your agent.  

Your question makes me want to check my state rules (Illinois), because I've thought many times that I might as well manage other people's STRs if I have all the processes set up to manage mine anyway.Finding a cleaning crew for 1 STR is difficult, but 5 is easy. 

In a recent post about how to minimize the taxes on rental income it was mentioned that: Setting aside reserves is an expense, so long as they are not excessive.

Do I need to set up an LLC?

Your CAP rate will be dangerously inaccurate if you calculate expenses incorrectly so let's break those down.Utility Set-up- As an overview you need to know the difference  between city-provided utilities and onsite such as Septic Tanks with Leech fields, lagoons, Wells, EtcGetting more specific what utilities are maintained by the community, paid by the community vs the tenants.I will give you a quick example, I own a park with a bunch of multifamily manufactured units of which I pay the electricity bill.

Section 8 is a common form of rental assitance in our area, however wait times for tenants to get approved due to demand/limited funding can be significant.

There is no set answer. 

I have used a basic registered agent service and set up an LLC.

An LLC would limit that, though not completely remove it as a possibility.