Where I have had luck and seen many of my clients making it work is on bigger 3/4 units in class A/B areas where ARV goes to 800k-1.1 million, as provides a big enough margin.

Acquired for $158,000 and a quick resale value of $200,000, the property offered excellent profit margins.

Acquired for $196,000 with a resale potential of $369,000 post-renovation, the deal offered excellent profit margins.

STR is all they do and their pricing and coverage beats everyone by a good margin.

They buy properties directly and passively manage properties relieving them of business risk while getting a stable cash on cash return of 15%+ per year.The hospitality sector is not a low margin business as far as STVRs go.

The listings were not found on the MLS, and I think i had to basically call and 800 number to coordinate the showing which was slightly interesting since they didn't / couldn't have MLS lockboxes (in NJ we have electronic/satellite tracked boxes).So, Redfin still believes that their "national call center of salary agents" with "pay the showings local agents" is better, not sure in what sense (probably for THEIR profit margins), than the current system.This continued trend to non-person-to-person transaction system might appeal to the younger generations, but I think they will find it lacking if given the chance. 

So I think the pricier markets something like Reno, NV (no bias haha) where there is inventory that needs a house hacker but we can still see the margin and exit and realize that hard work sweat equity. 

Overall inventory stayed flat at 69,464,000 square feet, with no new completions in the quarter.Asking and Effective RentAsking rents in Los Angeles declined marginally by 0.1% quarter-over-quarter to $34.21 per square foot in Q1 2024.

But also, these tenants might inhibit your ability to push rents on the other units, since tenant junk on balconies, or broken down cars in parking lots, etc just paint a bad vibe for the whole property.If it is a "marginal" tenant, I would give them an aggressive increase.  

It takes more capital and you can get more margin dollars on the exit with the compounding appreciation.