Check Alabama posts.  2nd lowest property taxes in the nation behind Hawaii.

In my opinion, I wouldn't worry as much about cash flow and just make sure your PITI (principal interest tax & insurance) less rental income is less than you would pay for rent in that particular area. 

The rentals are also taxed, of course, but Airbnb and VRBO automatically collect those fees when each stay is booked.

@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.

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. 

In this way they are saying they are not going to be a monopoly to FTC to try to win approval from the federal government.

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.

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

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.