There aren't many of these, as they need to check enough of the right boxes, to attract enough STR bookings.

Also, I believe that the idea of owning a home is less attractive to younger folks.

Not sure where you're advertising now, but you're obviously not attracting the best candidates.

If the numbers and your analysis are solid, then you should have no problem attracting financing.

The fact that you said your property is located in a highly desirable area and that it attracts and keeps long term tenants is a definite plus.

I suggested they drop the listing price from $189k to $149k to hopefully make their home the most attractive in the area. $50k profit in this scenerio changes their dynamic but....did they listen ?

It's just not a very attractive looking neighborhood because it's never been taken care of and the houses are all exactly the same and on a steep hill. 

High crime areas will only attract bad quality tenants.

Here is a thought for you: consider looking at properties -- maybe just off campus, perhaps more upscale than student housing -- that might be attractive to faculty and grad students.

The higher the perceived risk the higher the yield needs to be to attract an investor.