@Adam Bearup thank you for asking this question. I've been debating the same question too, and I appreciate everyone's informative responses and perspectives.
We are a military family and with transfers every few years, we currently don't have ability to put down roots to build a local portfolio. However, we do buy a primary residence each new duty station in "A" areas, then rent them out when we transfer. We own 3 properties in 3 different states, and have been landlords for 7 years.
Some of the benefits of higher-end rental properties that we have experienced are:
1) Rents have always been paid on time if not a week early. It follows that we have not had to experience the headache of fighting our tenants for rent, and/or go through the eviction process....yet.
2) We don't have property managers. It was more of a burden to have property managers to manage than it was to communicate directly with the tenants (and the tenants prefer direct communication as well). Like I said in #1, rents always come in (negating one major reason for having a property manager), so the only other issue a tenant needs my attention for is when they need a repair done. I get calls maybe 2 times per year per property.
3) The tenants take pride in their residence and take awesome care of the property. Being new at this, I don't know what dollar amount to place on this attribute. Hundreds, thousands maybe? Maybe a dollar amount should also be assigned to the amount of stress and worry I don't have to contend with?
4) Vacancy rate has been low. My first tenant move-out is happening for the first time in 7 years. I'll try managing the move-out and replacement tenant move-in myself, but if it goes poorly I'll look into hiring out this process to a management company in the future.
5) Tenants will let me know about every little problem there is in the house, which sounds annoying but I really appreciate that fact. For one, they care enough about their home to notice if something is wrong. And two, I can get repairs done before the damage snowballs and becomes even more costly.
In my experience with higher-end rentals, the one major disadvantage is the cash flow (which several others have mentioned in previous posts on this thread). While the cash flow has been meager, the appreciation we've seen in our properties has been phenomenal.
Prior to discovering BP a year ago, we had no game plan for what we were actually doing with our real estate or where we wanted it to take us. We are now very interested in cash flowing properties that will allow us financial freedom, which consequently is the opposite of what we have been doing with our real estate investing thus far. So shout out to BP for giving an accidental/aimless landlord a roadmap!
After reading the previous posts, it is clear to me that we if we want to achieve financial freedom via cash flow, then we will need to start buying cash flowing properties in "C"-ish areas. I'm sure will have to hire a property manager to handle tenant issues that we've been dodging thus far. I really love the ease of having higher-end rentals, but their cash flows won't help us achieve our goal as quickly as lower-end properties will.
From here, I think we will use the equity we've gained from the higher-end properties to finance the lower-end properties. In the end, it looks like we might dabble on both sides of the "A"/"B" vs. "C"/"D" investment property debate fence.
I hope my long-winded post has provided you some deeper insight into the higher-end rental side of things and helps you make a better REI decision that fits your unique situation. I would also like to echo what several other people have said: decide what your end game is, from there you will be able to create a roadmap of how to get there and it should be clear what decisions you need to make now in order to achieve your end game. Knowing concretely what my end game is now has helped me see clearly that I need to move away from higher-end rentals and into lower-end ones if I want financial freedom in the near future. Now that I have a roadmap and direction, hopefully success will follow! I wish I had more to offer in the way of numbers, ratios, and general experience, but I'm still a novice and learning. One more thing I can offer you though is that one of our properties is in Denver (Highlands Ranch) and I'd be happy to discuss the specific numbers associated with that property if you are interested. Just PM me. Good luck!