Carl
Level 15

Business & farm

Long term residential rental real estate income is always passive; especially if you only have one rental property. But generally, if you have three or less rental properties you'll have a hard time proving it's not passive if you're not a real estate professional.

To qualify as non-passive income, you have to provide services that are "directly beneficial to the tenant" on a recurring basis. For example, making the beds every morning, or providing something such as a "continental breakfast" every day. Or laundry services.

Things that don't count would include yard service. You're going to cut the grass anyway, even if the property sits vacant for six months.