Additionally, your brother would inherit your cost basis in the property, which could result in significant capital gains tax if he sells the property later.

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.  

You still have the cost of lease renewals, but that's minimal when compared to the cost of turnover.  

You don't always have to incentivize a tenant with a discount to get the tenant to stay, nor keep rents stagnant, but it is good to be aware of the business impact with respect to cost too.

Cost of construction is expensive and about to get worse.

So I almost “broken even” with the cost of construction vs. valuation aspect.

Well anyone can write anything into a contract, but whether it is legal and enforceable is for the courts to decide...It is State law here that a contractor must call 811 or they are liable for the costs.

If private companies continue to provide the insurance, I suspect we will see further increased premium costs which will need to be reflected in the rents tenants pay (all tenants: LTR, MTR, STR).  

Borrowing $200K at 4-5% will cost you $8000 - $10,000 of interest each year. 

This could be less costly and smaller hurdles than you would have with hard money lenders.