Your cash flow will obviously decrease but your cash on cash return will skyrocket as you don’t have that much cash stuck in the deal anymore.

Versus a family that books for two weeks, the same process occurs but the cleaning crew will visit the property less often and that could potentially increase or decrease that expense depending on your occupancy rate.

I can make an argument that they will.Will prices decrease?  

Doing a 40 year term as well, your payment does not decrease significantly from a 30 year due to the additional interest charges.Option 4: Of the 4 options presented, this appears like the choice I would make. 

.- sounds like you have  already  figured out  what you should do .....also  - fyi  regarding  any  seller  credits  you can  obtian ....if you believe that you  will sell the property /  refinance the loan or  possibly pay it off in short term - dont use the seller provided  concession to buy rate down -  ask for the  price to  be  decreased  ...if you think you will carry this loan for a longer period - consider the  buy down  rate/ fee options 

I like the concept of increasing my applicant pool and decreasing my vacancy period.

It would be a temporary imbalance of supply and demand and if that's the case I would guess in a month or two your competition on REO's would dramatically decrease.

All of the new development here is high end apartments and condos, so there is growing demand and decreasing supply in the mid-level rent and single family rental market.

Decreasing crime indexLike I said there are a bunch of other criteria you can and should look at depending on your strategy.

Population size - Is that area's population increasing or decreasing in size?