investing in small 1bed 1bath homes sub 600sq ft

[Edgar Perez]

I am in South East Wisconsin and there have been a few tiny homes coming up in my market that have peaked my interest.  Now I don't mean the cute custom built tiny homes that became real popular over the last couple years.  I am referring to traditionally built homes with basement/slab/crawl space foundation that were just built small 400 - 600 sq ft.  Some have more lot space than others more often than not they do not have a garage.  3 rooms plus bath (living, bed and kitchen).  These homes are generally being marketed 20-50k (neighborhood dependent) less than say a 2bed 1 bath 800-1000 sq ft home with yard and garage.  

Who here specializes or has experience with these types of homes?

My initial thoughts/questions:

• I would consider Airbnb, we are by no means a tourist area but we do have our visitors and our location and distance to both Milwaukee and Chicago lends itself to potential business travel. Short term rental is not my expertise and understand it may not be as passive as traditional rental; I'd like to give STR a try but if it doesn't work I wonder what the potential for long term is?
• I have long term buy and holds  and average a  1bed 1bath apartment will rent between 675-725 in my area could I expect more in rent because its a house?
• Is there a particular target demographic for these types of homes?  Especially on homes with less than 500sq ft.
• I find 1 bed apartments have more frequent turnover should I expect the same on these home?

Additionally being in the midwest should I be aware of anything in particular when looking at homes with a crawl space instead of basement or slab? 

What else should I factor in with these niche homes?  Am I being too optimistic with the potential here?  

Thanks you are always helpful

-Edgar