Of course I'm assuming here that like most investors you are reporting your STR rental income on Schedule E and not on Schedule C as you would if you were the owner of a hotel, motel, etc.There are some tax plays if you set up an S corporation to do your property management, but as there are administrative burdens to setting up an S corporation, it is only worth it if the investor's activities are substantial enough and only then in a specific set of circumstances, such as when the investor does not have any other sources of earned income and are therefore not eligible for certain tax tools that require the taxpayer to have earned income.  

I'm not saying you might get ripped off but... sh#t happens that you need to be aware, of and work with the contractor to make a plan to resolve any unforeseen issues as they come up.Again communication, communication, communication.

I'm here to help PatrickAsk me anythingStay focused and keep your visionWalk not in feelingsAnd never let outward circumstances deter

I've had a rental for 10 years but that was more a matter of circumstance then an active decision.  

Increasing rents too fast can 'push' renters out and then you have dark months and expenses which can take years to make up.So what I'm saying is don't go into a deal feeling like you can renegotiate the circumstances with the tenant.

In that circumstance, where its a slummed out completely illegal additional apartment, you will most certainly be F'd.

After you've given a clear SOW and a walk through there should be no question on price unless unforeseen problems arise.

Only thing that will prevent finishing on time is unforeseen issues with the house....or inspection times are days out.

@Ben Pohle for this specific circumstance, my girlfriend's brother in law is involved with the city council.  

The IRS generally looks at intent as well as actual facts and circumstances of each transaction.TL;dr - holding something for a year and a day will not necessarily make it capital gains.