While the market right now seems hyperinflated, Elk Grove does have a number of good things going that may make it a even more desirable rental market.

Posting dates are less prevalent  which may be more desirable from the site's owners as older, stale posts are not as likely to be noted as such when viewed on mobile device (I typically view and post via iPad). 

Average PPSF is about $135 and more if you are in desirable areas.

Even though my monthly income doesn't look as good, when I look at the past 2-4 years, I can see that they cash-flow just about the same, yet are less problematic.You don't have to invest in A class neighborhoods, and if you don't have much money to start out you can certainly invest in less desirable areas and still make money.

I graduated a few years ago with an elementary school teaching degree and without a prospective job on the horizon, I have settled in a less than desirable job.

Combine that strategy with a rounded diversification plan including stocks and/or ETFs both with covered calls, bonds, commodities and cash management and you have a great strategy for retirement and income replacement if desired.

For many the increased rent/desirability must be worth the liability and what it costs to insure.

You might want decide it's not worth doing it unless you make 12%, thus you'd only pay $50,000 / 12% = $416,667.In all the examples, "market value" is never known first, it is simply a function of the NOI and CAP rate or your desired return.

I have never seen it being an issue if you choose the candidate that best fits your desires because it is a room in your house.I always liked craigslist because I could list my requirements and than not respond to someone that did not meet them.

My desire is to keep this rental income, passive and tax deferred, as my other rentals are.