The property will be in more desirable locations that command better rents. 

I suspect a very large percentage of them will desire to stay coastal. 

For investors, would earning passive income through property cash flow (without actually owning the property) be appealing?

In my experience, there are a range of starting-off experiences, but one's experience is not always indicative of someone's desire/drive/commitment to pursue and thrive in real estate. 

It has to be in the most desirable/expensive areas of the country.

Increase your earnings, reduce expenses, save up, and invest.

A good sized room with small pocket office is much more desirable than two cramped rooms.

Out-of-state investing makes the most sense for me—it’s impossible to cash flow anywhere near me, and moving wouldn’t make sense because I wouldn’t be able to earn the same wages or find the same kind of jobs.Before this purchase, I already owned two properties: a long-term rental outside Houston, Texas, and a short-term rental in the Sierras in California.

You will still earn on them. 

So your debt is currently $3000 per month and your property earns you $1000 per month?