As a landlord myself I can tell you it is not smart to buy a $200,000 house to rent out. People renting out big houses are not usually there for long. I have a big house like that I rent out and 3 smaller houses in not so nice neighborhoods. The big house was my last house, and rather then selling it we decided to rent it out. We found that it sits vacant and rolls over more then the others. People renting these houses are usually those who have had an issue in their main home, such as a fire or whatnot, that requires them to be out of their house for a few months, or people building houses in that area and wanting their kids to warm to the schools before hand, etc. They are just very temporary renters. The smaller houses rent quickly, as they are cheap, and they are in areas where the average renter can't afford to move real quick, you know first and last months and paying for a moving truck is a struggle. Yeah, maybe it seems cold renting to people who simply can't afford to leave, but it is business. And if you live in a college town you can make quite a sizeable sum of dough as a side business renting out small little houses