However, with high rates, the next mortgage would be very expensive, and a vacancy would be intensely expensive with two mortgages.

With that said, I've done some research on the market and found the following information helpful in my considerations for Phoenix that you might find helpful as well:  Demand for both buying and renting property remains high due to the city's strong economy and growing population. 

You still claim the income as miscellaneous income and deduct property taxes and mortgage interest (subject to SALT and other high mortgage limitations) on your Schedule A, but that's it.2. 

Most have their own company's now and stay a part of the community to leverage each other.  

About me, most of my assets are RE but in another market so I would be diversifying in that market.Potential for appreciation is very uncertain: prices have risen a lot locally lately and are as high as they have ever been, and it’s unlikely higher prices would be affordable by locals.

We have a high saturation of rentals that has caused the market to lose money. 

I'm still struggling to get my first AirBnB but values are rising, gross annual yield is mainly above 10%

I looked into this at more than one occasion, because Milwaukee has such an old housing stock, everything is 60-120 years old.Most of the new apartments we see are 4 and 5 star developments with very high rents, this allows to offset the high cost of construction a little better.

Some general pros v cons - I'm sure other people will provide other insights as wellPros: -Above market rents- Monthly rent payment on time that you don't have to worry about or chase anyone down for (if full pay)- No shortage of tenants depending on your standards - Tenants are incentivized to not trash/destroy the unit, otherwise they'll lose their voucher (Yearly inspections made by local S8 inspectors to keep everyone honest- Rental payouts are normally adjusted 1-2 times a year to keep up with market rentsCons:- May take a little while to get onboarded - dealing with local govt can always take longer than expected   - Generally won't have a super high credit score (to be expected given it's the govt paying for rent)- Each unit will need to be inspected and meet a certain living standard in order to be approved for fundingYou'll want to make sure you work with a property manager who has extensive experience in working with S8. 

They were worried that our development is going to lower the value of their home- and it absolutely will- no one will pay a premium for a small, old home that butts up to a big apartment building.