Since you’re planning a mix of long-term and short-term rentals, keeping detailed records and setting up a solid system for managing finances early on will be key.

This negative equity position is one of many reasons that adding ADUs in a single family zone is not typically a good RE investment.OP whatever you decide to invest in, make sure you do thorough and conservative underwriting. good luck You’re right in that the level of underwriting I presented wasn’t institutional level - but for your average person just starting out, institutional grade analysis often makes the thought of investing overwhelming.

Thanks for the detailed reply, Joe.

This is a detailed topic.

I'm developing an AI-enabled analysis and lead generation tool for REI.  

Here’s how we handle applications:Income Verification: We require proof of income that’s at least three times the monthly rent, verified through six recent pay stubs and a detailed employment verification process.

My current occupancy rate is around 40%.Property Details:1,400 sq. ft. single-family home (3 bed, 2.5 bath)Weekend bookings are more frequent, with limited weekday staysWeekend rates: $150–$250/nightWeekday rates: $80–$100/nightAirbnb Listing: https://www.airbnb.com/h/vip-houstonWhat I've Done So Far:Created a brand-new Airbnb and booking.com listings to eliminate bad reviews from Airbnb and Booking.comHired a reliable cleaner ($150 per cleaning)Manually update pricing often on Airbnb (tried Pricelabs once and gave up when nothing improved within the month)Change my cover photo at least once a week or soListed the property on Airbnb, Vrbo, Booking.com, furnished finder, Zillow, and Facebook marketplaceScheduled handyman visits every six weeks for minor repairs and paint touch-upsI'd appreciate any feedback on the steps I've taken and suggestions on improving my listing and overall performance.

Far too many get stuck in the "paralysis by analysis" stage, thinking they just don't know enough to get started.

Personally I'm working on a very exciting niche, but will take some time to pull together; and I'll give you more details as it moves ahead. 

Next, it's onto the How, When, Where's and What's, details.