I think it will most likely be self-policing.I rented tiny studios in a 26 unit building and most of my tenants were grad students, once we found our niche.  

I built this house as a sort of tiny cabin and figured that if I were to upgrade someday (which seems will be the case now) I could rent it as a themed cabin getaway on there. 

You will be driven crazy, and you will also be the punching bag for every tiny thing that goes wrong.

We had a tiny parking lot with no assigned parking, and no guarantee of a parking space, etc.  

It worked for me because I had a tiny bit of money saved, I wasn't allowed to live with my parents anymore, and I had the 2 years of w2 proof.

The garage was used for office and I just added a bathroom and tiny kitchen.  

You already posted this scenario.. while it can happen you will have to hunt for it.like all things real estate returns price for risk.. rare is there high cash flow AND appreciation.. and tiny appreciation like 3% a year might look good but its not real.. you buy a rental that will make 12% under your scenario you need to find a 50k house that rents for 900 type thing .. which you can find.. so 3% appreciation it goes up a whopping 1,500 a year.. but in reality it stays at the same value.. since the next investor wants to make the same money you are.. only way values increase substantially is rents go way up.. and in cash flow markets rents ( which is a good thing) are generally very stable with not a lot of movement up or DOWN.But for your exercise check out small little towns in PA  and outside of Pittsburg and up towards Erie.. you will get the cash flow i bet.. appreciation only on paper not in reality.

But, as Michael Quarles always says: it isn’t about quantity—it’s about quality.

@Cole Fleishour - month to month leases, cameras outside to prove pets then back bill, personal i allow pets with weight, breed, and quantity limits of course with more deposit and additional rent, i just use luxury vinyl floor instead of carpet.

These lists only contain a tiny fraction of the renter population anyways, so are pretty much useless.