You have a better handle on reality than an investor who allocated 15% of $800 rent to cover vacancy and maintenance/capex.  

You have an 8% vacancy factor, but does that include bad debt? 

With a 5% vacancy and a 32% expense ratio (without looking at the property) the model projects a healthy Standalone DSCR of 1.21x.

How do you find potential revenue, vacancy rates, etc

When the building is fully rented allowing for a 10% vacancy the NOI will be $136,800.00 which will put the value around $1,700,000.00The refi I have in place at current rates will give me about 200K cash out and 50K cash flow a year.There's a ton more I could add in here but it's already a long post.

My market has a low vacancy rate.

@Solen KebedeTo manage a house-sharing property effectively, establish clear communication channels with tenants, automate rent collection, create a solid lease agreement, have a local support system, screen tenants thoroughly, use remote management technology, plan for vacancies, consider professional management, and prepare for your move.

Lower end tenants mean more headache:More frequent turn overHeavier turn costs/higher wear and tearSlow paymentsLonger vacancy between both the turn over time and finding another qualified tenantBeyond these factors, as others noted, a full unit renovation will cost about 15-20k if you want to do it pretty nice.  

Option 2 has a higher monthly payment and higher interest rate, potentially straining finances during slower months or vacancies.

The original tenant is charged for all expenses during the vacancy, whether it's six days or three months.