Today, I simply use total expense/vacancy excluding P&I of 40% of the rent (I am in a high rent market, in many markets I would use 50%, in cheap or lower class areas (below class c) I would use greater than 50%).  

I frequently had to explain to an insured, and often the insured's attorney, that the claim wasn't covered because the matter is excepted or excluded from coverage because of what's written in the policy.  

A premises liability only policy might be an option as well through an excess & surplus broker which would exclude the physical structure, but would afford coverage to you for liability issues that may arise from the subject property. 

You have had exactly $212 in minor maintenance expenses since the day you purchased the property, excluding this occurrence.

Others 15 yrs, etc.So we depreciate a portion of the asset costs faster.We do the study and get dollar amounts assigned to different parts and different schedules to front-load depreciation.Now you can get 5 or 6% of the value as a deduction in the early years...But wait... there's more.Bonus depreciation allows you to deduct a certain percentage of cost in the first year an asset is put into service.Anything that is on a schedule of 15 years or less...So the doors, sidewalks, HVAC, walls, latches, curbs, security, gates, etcA % of this stuff goes in Yr 1.For years 2015 through 2017, first-year bonus depreciation for these items was set at 50%.It was scheduled to go down to 40% in 2018 and 30% in 2019, 0% in 2020.But then the Tax Cuts and Jobs act moved this percentage to 100% from 2017 to 2022 and 80% in 2023 and 60% in 2024.Its not uncommon to allocate 30% of an asset cost to items that can be depreciated on a 15 year or faster time frame.So now 60% of that 30% of your asset's cost can be depreciated in the first year, excluding land.Pretty great.This is how real estate owners, investors, and operators make millions and pay very little in taxes compared to W2 employees.They pay even less and can offset other types of income if they are an RE Pro.

You have had exactly $212 in minor maintenance expenses since the day you purchased the property, excluding this occurrence.

The renovated unit would command around $2,300 per month in rent, excluding utilities, and is very close to the Elementary and Middle school.

This option minimizes taxes while allowing more flexibility to reinvest without 1031 restrictions.Option C: Sell Now Without the ExclusionSelling immediately means paying capital gains tax on the entire gain, including depreciation recapture, making this the least tax-efficient option.Additional Considerations:HELOC or Cash-Out Refi: If you want to keep the rental while accessing equity for your retirement home, consider a HELOC or cash-out refinance instead of selling.Estate Planning: If you hold the property until passing it to heirs, they receive a step-up in basis, eliminating capital gains taxes entirely.For tax efficiency, staying two more years allows you to partially exclude capital gains, while a 1031 exchange defers taxes if you plan to continue investing in rental properties.This post does not create a CPA-Client relationship.

You have had exactly $212 in minor maintenance expenses since the day you purchased the property, excluding this occurrence.

More units and bigger units would result in lower costs for what you are getting, but ADUs are small in size and small in number (excluding San Diego’s just terminated bonus ADU program).