I also have a large pole barn/man cave out there so there are limits on use at times out of respect for the tenant again.  

I originally locked this property up with the seller (bank REO) for a set price and they "represented" that they were selling the entire property which contained the "home site" house, tennis court, pool, spa, etc) and the "ranch site" which contained the other parcels with improvements consisting of guest house, horse stables, barn, horse arenas, bridge, river, etc.As it turns out, this bank screwed up and when they did the loan, they only encumbered the "home site" and thus, when they foreclosed, only foreclosed on the "home site" and not the balance of the property.

I use Apple Appliance for repairs (65 for service call), if my appliance is more than 5 years old I just replace it.

Investing isn't apples or oranges, it's the whole grocery store.

Opened up a hard apple cider bar 20 minutes south of Atlanta GA back in 2018.

Fourth, and probably most important, you are not comparing apples to apples, unless you are assuming person #1 also had $125k to spend and instead spent $25k on the house and the other $100k on partying. 

That isn't an apples to apples comparison.

I would just like to add that comparing to S&P 500 index fund is comparing apples and oranges. 

To quickly sift and compare apples to apples, the minimum a property gross to purchase price ratio needs to be 1.67% in markets I underwrite in.So for a 500K house, gross rent would need to hit at least $5000x1.67%, or $8,333 gross.Generally I see STR expenses to be between 35-40% of gross if you have management in place, cleaning revenue, maintenance, utilities, etc.

Here is one big one.In order to compare positive cash flow with negative cash flow, we really should be comparing apples to apples...meaning, the same property, with or without positive cash flow.