IRS website states the following:
“REAL ESTATE DEALERS - If you are a real estate dealer, rent received in the course of your trade or business is included in self-employment income. You are a real estate dealer if you are engaged in the business of selling real estate to customers with the purpose of making a profit from those sales.”
So if you own a rental property, the question is whether or not you receive the rent in the course of your trade or business (provided you are set up as self employed).
First let’s get the citation you found in IRS Publication 533 in the proper context. I quote,
“Real estate dealer. You are a real estate dealer if you are engaged in the business of selling real estate to customers with the purpose of making a profit from those sales. Rent you receive from real estate held for sale to customers is subject to SE tax. However, rent you receive from real estate held for speculation or investment is not subject to SE tax”.
If your rental property is held for an investment purpose, then your rental income is ordinary income on your tax return, not self-employment income. If your sole source of income is the rental income from your investment properties, then you are not “self-employed”.