While tax benefits are a nifty boost, they aren't even needed to beat the 401k.Rental property provides returns via:1.

@Justin Ward To be considered by IRS as a short-term rental and get the tax benefits you must meet the following requirements (defined by Treasury Regulation Sec. 1.469-1T(e)(3)(ii)(A))The average period of customer use is 7 days or lessThe average period of customer use is 30 days or less.

Definitely don't recommend doing an early distribution and paying the taxes and penalties. 

So if the delta on your savings versus interest costs is only 2%, and it appears you're a RE professional, your tax advantages will probably make that a wash meaning there's no advantage at all to spending all your cash unless you are just afraid of making a payment. 

As hotels lose market share, these municipalities are losing out on hotel taxes and misc. revenues that are difficult to collect from the small mom and pop STR operators.

I'm interested in learning all aspects of RE, including self managing property, and maybe get into STR.This being my first deal, I'm not confident in finding more flips, so I want to defer taxes to preserve my profits. 

Easier to do your taxes as well.....Search here about the need for an LLC when starting out or with just a few properties, usually not necessary or recommended (Except by attorneys-sorry Jason :-)

I was going to talk to CPAs, maybe attorneys, since I need to set up LLCs, do taxes, and advice in general regarding family/generational financial planning, but CFP may be a better route.

This is in the east side of Buda in 78610Property price is around 340,000 and the monthly payment for 80% mortgage at 7.125% with property taxes (2.32%), HOA and Insurance comes out to around 2,600$Rental comps suggest around 2200$ gross monthly rent. 

Insurance, taxes, repairs, maintenance, and management costs are all sky high and $300-400 below market rent is a sure financial loss.