Think about all the extra time trouble and cost it takes to turn an ordinary house into a vacation rental...just my two cents though...

So your saying select No Damage Protection and just submit an extra charge when it's warranted? 

If I sense the buyer is cut from this fabric, I will negotiate extra hard against repairs to the extent they simply walk.

We have increased our monthly rent to price ratio from your ~0.75% to 1.1% but the leverage ate up all the extra cash flow (even if the total return is likely higher).You could be a cash buyer and go from your one property to 20 and cash flow 20000/mo but you are still having to buy and manage 20 properties.You can do better on the total cash flow in other markets or rougher neighborhoods, but the story is similar: you are getting an extra ~25-35% in income for 20x the hassle.

I also agree that RE appreciation is unlikely to match the last dozen years, but you never know.Where I am unsure we agree is that paying $450k to improve the cash flow ~$3k (your numbers but I expect my delta wold be similar meaning both my cash flow estimates would be worse than yours but both would be worse by the same amount not affecting the difference) makes sense especially if the cost of having the extra $450k is only 6% rate which is historically simple to beat via numerous investment options and hopefully no one is investing in RE for an expected of 6%.  

Others investors drive extra ROI by thing like ability to reposition property for greater profitability and or less risk; ability to rehab property at less cost, ability to identify areas where gentrification is likely to occur, etc. 

If you can tolerate it, go for the extra roommate.

They’re built for heavy use and have faster drying times—usually 30–45 minutes—without needing major electrical changes.If you’re up for a bigger investment, adding extra stackable units in the garage could be a great long-term fix, though it’ll mean some electrical work and setting up proper ventilation.I’d probably go for the commercial upgrade in your current space first—it’s quicker and might solve the bottleneck right away.

The other 2 lots I created ended up being on the other side of the street so it didn't really effect how my estate was laid out and $400k is a nice lil chunk of extra change to have when you're doing a big build.

I think if you have a little extra time, operating a smaller STR business can pick up some good income.