The best strategy I see for it is as a Luxury STR, I’m just not sure the market supports this. 

Max price point would be around $350k but the lower the better.Any other emerging markets / cities in the US that would be good to get into?

Being nit picky and requiring the repairs is the new norm in todays market in my opinion.

I am currently in the market of buying something else, thinking about downsizing to a condo.

I’m looking to see if the mid term rental market is good in that area?

She'd have to invest some money to create this set-up. 3) Selling doesn't make a lot of sense, because in this market, she'd end up paying the same for a small place, condo, with less flexibility. 

Make sure to conduct thorough financial analysis and consider factors such as property appreciation, rental demand, and market conditions.

I do not know your markets, but the markets I am looking at are up big since 2019.  

Otherwise a typical DSCR loan based on market long term rents should be sufficient to qualify? 

It sounds like rents are so far below market there’s never any vacancies?