The monthly rent would likely be lower, but the entry costs and potential regulatory hurdles might also be less.Here are my main considerations:Rental Income: Higher in Berkeley ($2k/month) vs. potentially lower in the Midwest.Appreciation: Likely higher in Berkeley.Management: Easier to manage the ADU since it's close to home, but more regulatory headaches.Diversification and Simplicity: Potentially less hassle with a property in the Midwest.Given these factors, what would you recommend?

Two contributing factors are high construction costs and regulations that make obtaining a construction permit difficult.California already has a large housing shortage.

It's not unusual to see 3/1 and 4/1 Section 8 properties but that single bathroom would not do well as an MTR.Overall, I'd say location and the shape of the property is going to be your key driver and the factors that will make or break you in the MTR space so very carefully evaluate both before you make your decision. 

@Jaekwan LeeThe rent-to-price ratio and expense ratio are critical factors in property evaluation.

@Sam LiuDepends on how much headache factor you're looking for. $3K x 12 months occupancy (LTR) = $36,000 annually $4K x 9 months occupancy (MTR) = $36,000 annually Damage can happen with any property at any time.

Can usually allot 5-10% vacancy factor and same for maintenance.9) Class B usually also okay, but needs more attention from owner and/or PMC.

Our Agent knew we were beat up buyers since we lost 3 homes prior and switched agents..The agent influenced us to go non contingent offer waiving everything… if we wanted to win the house.

This shift in priorities not only influences real estate markets but also encourages communities to adopt more sustainable practices and resilience measures to attract and retain residents.

Be mindful when you do the cost segregation study, the basis will be based on the carryover basis factoring in the deferred gain via 1031 exchange.

Loan amount, fico score, experience and occupancy play a factor.