We have a young family and don't want to get in over our heads on debt should something go south (and don't want to be over leveraged if we decide to move to a new primary)40% was where we felt good about the cash flow, and can be relatively sure we wont be losing money each month even if something unexpected goes wrong, and we have it sitting in the bank from a stock sell off.

Do you have the connections if things go wrong?  

But be aware more things will go wrong than you expect.

@Jim K. made good points to consider...as we are in the investment/property management business we don't have the same issues as him but they are all good points.For us it is more about if our handyman or plumber wants to rent from us then if something goes wrong on either end we now have a problem on both ends. 

The reason I think new construction can provide that opportunity is that you can eliminate inefficiencies.My experience is that students don't care about dining rooms, garages, super high end bathrooms.I certainly could be wrong but building to your customer seems easier than remodeling to your customer.  

Don’t get me wrong, I MUcH prefer SFR.

The best question to ask yourself is if you have the time/personality and contacts to handle it if things go wrong. 

I sincerely hope I'm wrong.

Don’t get me wrong SF is a great place to live but tough for landlords.

This property was my first, I feel like everything went wrong there: 4 flooding, bad tenants, overbudget renos but somehow still came out ahead in an economic recession (given enough time, real estate is very forgiving) so this property taught me a lot about what NOT to do.