The government pays part of the rent and tenant is responsible for part of the rent - the ratio is determined by the government.Pros - government guarantees the rent and depending on the situation, the rent checks are virtually automatic and like clockwork.

@Mike TerrySelf-directed IRA funds can be invested into virtually anything except collectibles and life insurance contracts.

@Matt Gilroy  I live and operate a residential property business in Washington State.

Without too much effort (and after quickly responding to and fixing some of the things that needed improvement when just starting out), short term renting on Airbnb ended up covering our breakeven costs for those 3 months.Last week our daughter and the other students moved in, so the house is now operating in student rental mode. 

In your area look for the potential economic drivers that are operational today that may attract outside investment.

Please correct me if I am missing some line items here, but here are the working numbers for the property:+ Gross Rental Income: $150,000- Cleaning Fees: ($21,600)- Management Fees:  ($19,260)- Property Taxes: ($3,700)- Insurance: ($2,400)- Trash & Local Tax: ($650)- Utilities: ($7,200)- Pest Control ($560)- Supplies/Maintenance: ($1200)- Acct/Legal: ($1500)TOTAL EXPENSES = ($58,070)Net Operating Income = $91,930---Based on my limited understanding of the local CAP rates for similar properties in Philadelphia, PA 19106 it looks like 5-6% is a realistic number. 

The issue is that the initial cash flow is lower than most locations (and much lower than the virtually 0 appreciation markets). 

They are becoming more and more common/popular in the Joshua Tree area of California where I am an active investor/VRBO operator. 

I see in their supplied Proforma that Net Operating Income is $75,720 and their listed Cap Rate is 5.11%.When I do the formula for finding value (value = NOI/Cap Rate), I end up with $1,481,800.What this appears to tell me is that they are charging a $218,200 premium over the value of the property when figured against a Cap Rate of 5.11%, correct?

It did explain why the house had a lot of damage to the siding corners and window trims and a later water issue could have been part of it… Whoever did the that drainage work should fire their operator.