Unless the borrower is self employed and takes a lot of expenses to show lower income on their returns then it usually makes sense to pay a couple thousand a year in higher interest (you can pay like 4,000 a year in additional interest for DSCR if you are saving 30+k on your tax bill kind of math lol)

Additionally, it provides investors with the opportunity to add a unit on a property they already own, simplifying management since the new unit is in the same location.Finding a vacant lot is both expensive and difficult, so the ability to build, subdivide, and create new development opportunities can make financing easier.

The challenge with property managers is that they are actually very expensive.

This is not the cheap markets but the higher cost markets.This year I added a half bathroom out of existing space in a very expensive area. 

In the area I lived the properties were too expensive (Watsonville CA) so I began doing farther searches out of my area.

The purchase cost is on average $350k - $450k.

The expensive one MAYBE 7-12, 14 if you take extra good care of of it. 

Income and expenses, money in and money out.

Considering the change as the STR numbers just aren't working, especially with the associated expenses and turnover frequency.

Even if you only averaged 2.8% appreciation annually, which if you've had it 20 years I have no clue how that's true given prices have well more than doubled in that time, youre skipping over the fact that you have been benefiting from that appreciation on the ENTIRE house, not just the % you paid for.