You mentioned not wanting to invest a lot of money, and that's fine, but having additional capital may still be required.  

Basically, I want to get to the point where I can start earning at a level where I can move out of my parents house, pay down my loans (hopefully before my own [future] kids are racking up their own), and perhaps even retire... ...all before I die.

Being that you are in Japan that ads additional difficulties.  

Paul, MN and I'm renting it out to some college kids.

College English professor and run an after school program for kids. 

Free cash of $1,300/month (the $1,150 you are currently paying in mortgage and utilities plus $150 cash) could then be used to pay towards principal on SL and car not, accelerating debt pay down.78% RR on 20k minus 5% avg SL and Car interest and 4% mortgage interest = IRR of 69%I think (assuming I'm looking at this the right way), using your 20K in cash soldiers to generate additional income is more advantageous than using it to pay down debt.

In addition, I'd own the liability of paying for stuff when it breaks, and my insurance would cost more.

ONLY look where the best schools  are, in the best neighborhoods you can afford.The neighborhood and  house should have instant curb appeal, sit 'at or above' street level, yard for the kids to play in.

Additional keywords: Indy, Indiana, Indianapolis

Additionally, I've been told ( and read on many sites) that if a junior lien holder is foreclosing... the senior lien is Not wiped out and the new owner becomes responsible for The entire amount owed on the home.