Prices would sky rocket as demand would quickly outstrip supply. 

Private lending is not rocket science but there are a lot of moving parts and considerations you need to address throughout the process.

Im a little knee but I guess it’s supply and demand but in real estate things move slow.One thing that happened in my market which is outside Manhattan, is the prices rocketed up because people left the city and took on a commute and to them the prices were no problem (more money in the city) This definitely hit single family homes hard but seems to have hit everything.

Honestly though, I think today’s STR rates are not predictable since Covid, when pricing went rocket high for the summer, and the fall/winter, we’ll, time will tell.

I agree with @Brian Corbett owning and running your rental is not rocket science.

Will this be allowed by my mortgage company (I'm using Rocket Mortgage)?

At this exact moment in time, this is true in many places, yet in MANY places rental rates are still on a rocket-ship up.

It took off like a rocket.

Unless you are in a town where FMV rent is really rocketting like Toronto and Vancouver.

Same with rent rates.. an SFR that will only rent for 500 bucks or so is on the bottom end and same sq ft that rents for 1500 is on the top end.The differences of course are basically crime schools and class of tenant.this all leads to how successful the project will be.Stable tenant.. who is nice to the house feels safe in the home will stay and treat you well.Unstable tenant, who needs their windows barred and who is really rough on the house. that leads to low financial performanceOf course this is general feedback and its not rocket science.