Be sure to: call & verify employment references, request pay stubs to confirm income & check rental history by contacting the previous landlords.Keep the momentum going!

Spend what’s needed to upgrade with reliable mechanical systems, roof that doesn’t leak, remediate all mold; interior design modernized; in other words a place that will attract a higher income no hassle tenant.  

However, before you do so you should ensure that your revenue from rental income covers ALL your property expenses in the townhome, including mortgage, taxes, insurance, maintenance/repairs, vacancy, property management, etc...

Also, focus on 2 years of job/income stability.Class D Properties:Cashflow vs Appreciation: Typically, all cashflow with little, maybe even negative, relative rent & value appreciationVacancy Est: 20%+ should be used to cover nonpayment, evictions & damages.Tenant Pool: majority will have FICO scores under 560 (almost 30% probability of default), little to no good tradelines, lots of collections & chargeoffs, recent evictions.

Also, focus on 2 years of job/income stability.Class D Properties:Cashflow vs Appreciation: Typically, all cashflow with little, maybe even negative, relative rent & value appreciationVacancy Est: 20%+ should be used to cover nonpayment, evictions & damages.Tenant Pool: majority will have FICO scores under 560 (almost 30% probability of default), little to no good tradelines, lots of collections & chargeoffs, recent evictions.

Rental income is subject to tax, but it is also possible to deduct many costs related to owning and maintaining rental property, including property management fees, repairs, and mortgage interest payments.Additionally, for those investors holding properties in Germany for the long-term, the country's capital gains tax law is attractive.

Being a real estate professional allows you to treat the income as non-passive, allowing higher high income tax payers to pay less in taxes.

I really like LLCs compared to corporations because of the free stepped up basis for passing property to my children. 

Part of those cuts included the short-term rental tax loophole, a strategy real estate investors can use to help mitigate their rental income tax by offsetting earned income with real estate losses, and could be renewed or extended.  

The reason the answer is framed this way is because when you take a HELOC out to make repairs on your personal residence, you are allowed to tax the interest deduction on your Schedule A of your 1040 income tax return.