I question the assumption that nice houses in owner-occupied neighborhoods will appreciate and junkers won't.

Growing business are growing customers for financial institutions, some programs and terms will change but they will still want you.

(In reality these units are actually already rented out)----------Using the 50% rule for a quick glance,$4,470 x 50% = $2,235 for expenses and $2,235 to pay the mortgage$2,235 - $977.90 = $1,257.10 (cash flow)$1,257.10 / 3 units = $419.03 cash flow / unit---------When I plugged this into the Rental Property Calculator I used these parameters -->Property Taxes: $7,000Points/Lender Charges: $0ARV: $0 (no renovations planned or needed)Electricity & Heat: $0 (Tenant Responsibility)Water: $100 (guess)Trash: $100 (guess)Property Insurance: $150 (guess)Vacancy Rate: 5% (guess)Repairs & Maintenance: 5%Capital Expenditures: 5%Management: 10%Future Assumptions: 2% (For all three)The Rental Property Calculator gave me expenses of around $3,000/m and cash flow of around $1,200/m, which was around what I got with the 50% rule.What am I missing?

Reminds me of the telephone phone trees.... where the customer in exasperation finally cries out for "Live Person!"

All of this to say, unless the agent has a proven track record for renting similar places or a network of potential customers (read: international companies regularly relocating workers), I wouldn't bother with them.

Make some more calls - call an agent or two on the other side of your state, who may see you as bonus business, not a local customer to try and steer into a full replacement policy, unless, you really want to build a new home right where your rental is on the very outside chance there's a total loss. 

i have been using an excel spreadsheet i custom built for what we need)

(Related: We all know interest rates will rise sooner or later, but exactly when is anyone's guess)So the only thing you can really do is choose based on your customers' preferences today, since "money today is worth more than money tomorrow" anyway.

My assumption is that if they have owned the properties for 20 years, the owners may be ready to retire and could use a large chunk of cash and to eliminate the headache of ownership.

They wanted it under our names only and they would only do it with existing customers.