This is appealing because we KNOW the neighborhood, we KNOW the market and the demand.  

Installing Granite counters will not only up the value of the home but demand a higher rent value.   

My suggestion would be to go to a few real estate clubs in your area, speak to some in the business of lending and flipping, and get a sense of the demand.

Interest accrues but is generally disallowed after the notice of demand is made as that begins the process of foreclosure and ends past collection attempts in servicing the note. 

My houses are in a small population rural area, where there is rough equilibrium between supply and demand.  

Who knows how reliable they were before, but if they've gotten comfortable living rent free, my guess is you'll have some hurdles with them, and perhaps some demands for repairs.

Rentals in this area seems to have stabilized and with SFH prices going up, there should continue to be rental demands.  

However, the takeaway from that experience was frequently, they are such cash cows that the owners demand unreasonable prices for them.  

Are they in demand or should I just rehab and try to sell vacant?

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