I work full time and have a steady taxable income of just over 100,000 a year.

Because there are three, not one, reasons to invest in rentals, in that order:Wealth building Cash flowTax benefits (a distant 3rd)If you're strictly talking about tax benefits, you have them even when your losses are locked up, for example:You can have positive cash flow which is not taxed, due to depreciationYou can refinance and pull out equity in cash without paying taxesYou can upgrade to a bigger property without a taxable sale via a 1031 exchange

If you can raise rents or decrease expenses, that should be considered in your evaluation. 

As for HUD - my opinion is that the quality of homes has decreased substantially over the past few years.

One thing I'm sure of: the regulations will increase over time and never decrease.

Interest rates are already going up, so that decreases buying power for sure.

Different owners with different paint schemes, and especially different roof finishes definitely decreases curb appeal and value.

Is there another way to put the proposal together to make the 10 year option more appealing to them other than decreasing the rent$/sf?

Another note on that: the interest rate will reset every 5 year and there are prepayment penalaties that decrease the closer you get to each reset period.

Our intent is to increase the revenue to a point where we can create an internally owned PM LLC that will sustainably manage all properties in the portfolio so we can continue to grow with a decreased labor burden.