Houses are still relatively cheap and rents are relatively high.

As in you generally can't roll the costs into a loan (except in a few special cases), so why don't they just get the place that is double their budget that they always love if they have an extra $150K liquid to do the rehab on the cheap place?

Some will just go straight to investing and live cheap.

I had a glass company come out and repair the glass in a few windows (cheap) and then had the window frames painted white.

and if you hire a property management company and a repair is needed, they can charge high for it and you have no way to know if its the right price for the repair. and you have to pay them for their services and they are not cheap.

The lists are relatively cheap.

It sounds like it will be a cheap place to live for a period of time.  

Now I feel cheap. :-)Here's what I would assume based on it being an 1100 sq ft home.3bdrm, 1.5 bath.So a full gut:1) 10 windows = 5k2) Siding = 4k3) HVAC 4 to 5k (furnace and a/c)4) Electrical (rewire and new panel) = 4k5) Plumbing = 3k to 5k (assumes crawl or basement - if slab, this price is much higher) depending on if you're moving anything or not.6) Full bath with tile surround above tub (simple pattern) = 5k7) Half bath = 2,0008) Kitchen (cabinets and countertops) =6k9) Light fixtures = 1,80010) Roof = 4k to 5k11) Flooring (carpet for bedrooms and family room, tile for kitchen/dining, bathrooms and foyer and need durock under tile) = 5k12) Drywall reparis - 1k (I'm assuming you'll need some drywall work done but not necessarily have to resheet the entire house.

Flights are cheap, or it's not that long of a drive when the weather is decent - come on up and see for yourself. 

We currently own a beach Coop which we are renting out while living at home for dirt cheap.