By Jason Watson (Google+)
Generally Yes. A rental activity is a passive activity even if you materially participated in that activity, unless you materially participated as a real estate professional. An activity is a rental activity if tangible property (real or personal) is used by customers or held for use by customers and the gross income from the activity represents amounts paid mainly for the use of the property. It does not matter whether the use is under a lease, a service contract, or some other arrangement.
There are several exceptions to rental activities, such as hotels. See IRS Publication 925.