It's kind of disconcerting when I can only raise rents by 5% but insurance is increasing by 10% to 15% per year. 

Adding a 1/2 bath, new roof, central air or other typical improvements will increase the value of the property. 

Currently we are seeing STR owners posting for sale due to reduction in prices they can get per night and the vacancy rate increasing. 

Do you need to increase rents in the next year to cover your costs?

There doesn’t seem to be a lot of great deals where I am since land has increased in value so much in the last few years.

It's not that different from a normal rent increase.

How about realizing that when you use the current property taxes of a property you are buying to calculate your per door profit that the following year your taxes will reset to what YOU paid for the property and will likely significantly increase your tax expense - which can take you from a positive cash flow to a negative cash flow on a low cash flow property… now you are paying your tenants to live in the property every month out of your W2 income  hoping for an appreciation play until rents hopefully increase.I could go on and on.  

This will increase the return above what can be obtained on a passive investment.The flipside of having the power to control everything is that it can be alot of work (and a full-time job if a person is putting in sweat equity).

You can likely do this with your savings rate (that will likely increase) and age. 

With no comps in the area for new construction and the highest rehab selling for 205k, building enough at the onset, 4-6 new construction homes, may be the only way to start a neighborhood turn.The city is looking to increase density in the area and add anchor points in near the area to cater to future investment.