Just focusing on the passive income you want to achieve will leave you chasing cash flow which will have you buying properties in worse areas with harder tenancies that seem to cash flow better, but will have large cap ex.Any time someone asks a question about where to invest and it can be anywhere, they aren't ready to invest and are opening themselves up to every pitch in the world on an area.

Through proactive maintenance, efficient tenant placement, and careful financial management, I optimized rental income and ensured a steady cash flow.

The expectation here is more income, assuming that your property is in an area where furnished rentals are in demand.

The property is $400k and brings in about $40k in rental income without the residential unit. 

@Tony Schmucker Now that you know all of those markets work from a Macro perspective you should look to see where you want to live for 2-3 years and what your and your wife's income will be in those markets.

WIth the new FHA & Fannie Mae legislation, many lenders are forecasting the rental income from additional units, even if they're not a zoned duplex.

Sorry for the tough love, but not buying the above.You & your wife's salaries should cover your expenses, while the income from your remodeling gigs should be saved.Recommend you review EVERY dollar you made and what you spent it on in 2024.

A debt service loan would be a good option if your DTI is high, you want to close in an LLC, you're self-employed or have low income on paper, or you don't have a stable 2-year work history.

They've gone as far as writing algorithms that pull data points like crime rates, age, median income, number of coffee shops and hundreds of others to create heat maps of where to buy.  

Verify income: Always make sure they make 3 times the money required monthly for rent.