Over the last ten years, but particularly the last 3 years, values have increased at a far faster rate than rents have.

Our city is really inconsistent so appreciation values tend to be more street to street. 

Current value of my primary is $1,200,000 and I owe $380,000 on the loan.

Returns are always suppose to be high.

We've had friends own properties in high risk areas (coasts / fire-prone areas). 

Primary you can go as high as 90% CLTV and investment 80% Max LTV but with most DSCR or lenders 75% MAX investment.Best way to map this out or to make sure your taking the right steps with the right property is to have a long conversation with a Seasoned Banker and your realtor. 

I would highly encourage you to check out SRO or Single Room Occupancy as a potential alternative or in addition to STR properties. 

It often feels like either selling high and buying high, or selling low and buying low.

Some counties in Virginia loves them because they have little employment so no big population increase = more burden on schools and the tax basis is very high because of the personal property inside of them so they pay a lot in taxesAs you mention need to be near a power source and I spent 5 years trying to get one approved in 30 acre parcel that the county wanted the site for something else - so they can be challengingTo get zoning approved

If you look at the PadSplit website, they put up walls and convert the living room and dining room into more bedrooms, to fit even more people and get those high incomes.