That’s an important ruling, because whether or not rentals are a business largely depends on the level of activity involved.

I feel like in a market of $1800 apartments and $350k 'entry level' houses, there would be a huge demand for $1200-1400 rentals and sub-200k new homes, even if minimal in sqft and design.

It's their fault, and the power lies with them to reverse their poor past choices and pick themselves up a bit by their own bootstraps.You're going to tell these new tenants that what's primarily wrong with them is not a legacy of a crime against humanity in the form of three hundred years of black slavery, followed by an unfunded emancipation that turned a huge number of Americans into desperate economic refugees based on the color of their skin, followed by a legacy of organized race hatred, bigotry, pseudoscientific and religious condemnation, and of course overwhelming and widespread intimidation and coercion, followed by a series of failed half-hearted half-measures coupled with an absolute refusal to consider slave reparations and the most lopsided minority levels of poverty and incarceration in the developed world.You're going to explain to these black folks that all that is of secondary importance, and what's REALLY important now is that they get better managing their money so they can hand it over to you more efficiently and you won't have to work so hard to get it.

I'm on cape cod MA, upper cape specifically, where hundreds of thousands of tourista flock each summer but also live in a town that has enough year round residence and business that a food place can stand on it's own. 

But before you make that decision, you need to have a serious come to jesus about what your goals, needs, and deal breakers are with regard to:Time - how much time can you reasonably afford to spend on the investment once it's made, on an ongoing basis Control - are you willing to sacrifice a bit of your return for someone else to handle tenanting, maintenance, and turnover, or do you want maximum control regardless of your experience levelResolve - if you're inclined to be very hands-on, do you honestly know that you will be able to maintain the level of involvement long-term?

SFR from my perspective works best in a lot of post industrial towns - Chicago, Cleveland, Philadelphia, Baltimore - where rowhomes proliferated lending the stock an even greater level of standardization than most apartment building have internally along with a very low cost/unit and an outsized ARV on a refinance.

According to the article below "borrowers will receive favorable pricing in exchange for limiting rent growth on 80% of the units in the property and keeping them at levels considered workforce housing for the life of the loan."

Lender requirements actually vary a great deal on rent verification, but at the basic no overlays level I'd say about 85% of FHA DU findings come back with "no verification of rental history is needed."

I am self managing these units and enjoying it at the low level. 

- If so, at what tax rate do I pay taxes - at the personal progressive income tax level that US citizens would pay or a different rate?