Unless your rental activity is very unusual, I suggest NOT electing the Safe Harbor. I believe nearly all rentals qualify as trades or businesses so the Safe Harbor election would not be needed except in very rare circumstances. If you spend anywhere near 250 hours a year, I'd venture to say your rental is a trade or business anyway (assuming you charge fair market rents and your activity is regular and continuous - that could be monthly involvement, not needed every day). Another reason to avoid the 250 hr Safe Harbor is that the election is required to be made under the penalty of perjury and I believe that's another potential headache to avoid.
