I see that property prices remain relatively high but there is some softening.

If a tenant is regularly late on payments, there is a very high probability that they will eventually stop paying or violate the lease in other ways that cost you far more than the late fees you see as "extra income."

One other thing to add- I would highly suggest making a rental verification part of your process.

The risk is very high when you are brand spanking new and you will definitely need to go through some transactions to get an idea of what you are doing. 

As noted by Ben, I highly advise that you target single-family homes with in-law suites or additional living space that can be converted into a separate unit and sourced as an STR via Airbnb or on another short-term rental platform.

Active Market High and/or consistent transaction volume.

We own our primary, own a STR internationally, 3 commercial buildings, and a 4-unit apartment building - so we are highly familiar with real estate but here's a new conundrum.

I also have 11 other LTR doors in the city (also do extremely well).If you have a high capacity to save more capital you could do BRRRR's in Detroit.

@Benjamin WeinhartMy experience on this tax forum tells me that highly technical discussions of the Code/Regs nuances are not well suited for this platform.That said, my 2 cents is that this issue is a matter of interpretation.

I would say the cost if it does become an issue could be high but that is a call you have to make.