How much will you make after agreeing to those terms minus carrying costs and taxes? 

Start-up costs are also deductible but are amortized over 15 years with a limit of 5k.Start-up costs have strict rules and your case might not be the same as this one.Case Summary:Timeline line of eventsStarted investigating property: FebPut first contract (canceled): MayBought first property: December 30thWhether a taxpayer is engaged in a trade or business is determined using a facts and circumstances test under which courts have focused on the following three factors that indicate the existence of a trade or business:Whether the taxpayer undertook the activity intending to earn a profit;Whether the taxpayer is regularly and actively involved in the activity; andWhether the taxpayer's activity has actually commenced.On the basis investor testimony, we may assume that he undertook this activity to make a profit and that he regularly and actively engaged in it.

If you don't know the law, you can't control the scenario and tenants will continue to make your life miserable. 

Also, make sure you have someone restocking the machine and not yourself.

Instead, just make it a habit to show up regularly and deliver amazing content.

South Pasadena is very expensive so Yorba Linda/Placentia makes more sense.

And basically anything that rings a bell would be helpful.The reason i am asking about this is i am trying to understand if there is a market need (pain) to make revenue streams more predictable and to insure away such risks.

If the city's requirements are bare-bones but all active rental listings are more elaborate, we go with the market trends to make sure we are competitive & provide what tenants are looking for.

Your comment about building more houses/increasing supply to make housing more affordable seems to indicate that you are referring to simply increasing supply to lower prices.  

I want to make sure that I am adequately protected against potential liabilities and unforeseen events, so any guidance from experienced landlords would be greatly appreciated.