(For example, extreme taxation or rules about non-owner occupied properties being eligible for vacation rentals.

I didn't deduct it from the rent.

The taxes and penalty were deducted before they distributed the balance to me.

I know here in CT we have 30 days to give a tenant their deposit back minus any deductions once they vacate and provide a forwarding address.You want to take your time going through the unit and noting anything that is damaged beyond normal wear and tear and then take it from there. 

@Charlie Moore @Michael Hakes For landlord books:- The BP book on managing rentals - http://get.biggerpockets.com/rentalbook/ + https://www.amazon.com/Landlording-AutoPilot-No-Brainer-Profits-Smartphone/dp/1119467918/- For taxes - https://www.amazon.com/Every-Landlords-Tax-Deduction-Guide/dp/1413327028 - or latest edition- For risk management: https://www.amazon.com/Every-Landlords-Property-Protection-Guide/dp/1413307000/- For more suggestions: https://www.biggerpockets.com/forums/759/topics/561449-real-estate-business-book-club

If one views the (deductible) property management fee as multi-faceted (“asset protection” in the form of professional management in addition to all the other PM functions), it’s well worth it.  

You need to pay yourself a salary, subject to self employment taxes (15%+)You might be eligible for 20% off the income on S corp, but check with a CPA as it comes with many restrictions such as the type of income and your household incomeC corp will have the same wage requirement (15.3%), but technically some parts flow to you and some parts stay with parent.  

@Benjamin Wiltshire if you are a first time home owner and plan on living in the property I know you can receive lower rates on a loan also can deduct mortgage related expenses from your tax bill...find a property big enough to house a tenant or 2 as well as yourself you can receive ample income which should be enough to pay what would be your rent while still makin some sort of income

You can refinance and do the same thing.Then there is the business side of rental properties, which lets you deduct many business related expenses (home office, supplies, mileage, etc.) and Section 179 vehicle purchase expenses (and other equipment, for that matter) that are not deductible for purely passive investments.If you hold title in an LLC you can distribute out some income as self employment income, on which you will owe self employment taxes.

I have the LLC as a pass-through partnership, so whatever profits remain after paying all of my expenses is eligible for the new QBI deduction, as well as funding an I-401k plan.