For most investors, to provide true separation would be cost prohibitive (between $10k-$15k). 

I can't get the sense for the cost of their "Stage 2" service and they won't disclose it.

Insurance cost for weather-related disasters is growing to a major concern in many of the southern markets.

Depends on what you have in the deal and what it cost IMHO.$200 mo on a $150k house is ok I guess.... 

I agree with Collin.The Smokies do have a lot of competition, so you need to have a view, decent location, good to great amenities etc to stand out.We have a 6-bedroom cabin there, but I imagine a 3 to 4 bedroom would be in the sweet spot of not too big or not too small.

For me the area I was concerned with was estimating costs.

They get a higher return since they are covering housing cost, have the $250k per spouse primary residence deduction in gains, is a savings account, higher leverage position, lower interest rate possible, will pay more premium for location, etc.House might be overpriced for REITs but not for home owners.  

Suspect it was in competition for largest budget surplus in the country.

If any damage arises from her negligence she will be getting the bills for damages, plus costs of collecting which you bill as well as your attorney in addition to the termination of her lease.

If you buy for $110k you can finance $88k if you come out of pocket for the $22k down payment plus closing costs.