This is what ChatGPT said about it.IRS Code § 831(b) refers to a special tax provision under the Internal Revenue Code that applies to small insurance companies, particularly “micro-captive insurance companies.”Here’s a plain-English summary:IRC § 831(b) - OverviewWhat it does:Allows small insurance companies to elect to be taxed only on their investment income (and not their underwriting income, or insurance premiums received).Key Features:Eligibility Cap:As of recent updates, to qualify under § 831(b), the insurance company must have annual net written premiums or direct written premiums that do not exceed $2.8 million (as adjusted for inflation).Election Required:The insurance company must formally elect 831(b) treatment with the IRS.

There are some markets that I know are good just based on STR premium like Nashville.

Sometimes it's worth paying a higher premium to not deal with the bottom of the barrel bull s h i t 

Is there a demand for premium apartments there? 

A similar house (in a worse town) rented for $1.91/sq ft a few months ago according to a Rentometer report I ran - we're currently listed around $1.52/sq ft.A home on my same street was gut reno'd and currently rents for $9,500/mo (smaller sq ft).But if I check Facebook Marketplace for homes in similar towns (similar beds and baths), the premium is much higher - towns like Lexington and Newton are more like $2.50+/sq ft, for much smaller houses. 

Of course you have to share the common areas with more people.Many LL charge a premium for leases significantly less than a year.  

Proper DOES include some minor coverages that others do not, but they are charging a massive premium for it. 

These are annualized returns that can be compared to stock market returns so that you make sure you're getting paid a premium on investing in real estate over just dumping money into an index fund.For your deal, you'd need to negotiate the sale price down to around $142k to get that kind of return.Why is you Sensitivity Analysis based on a purchase price of $194,900?

I think this could command a small premium in both sale price and ADR but I don't think it would translate to a gold mine. 

For example: My father owns a sub $500K home in St Lucie County Florida - a region that I’m from and would love to get back to investing in one day…but his insurance premium is nearing $6K annually and if we extrapolate the rate of insurance increase over the duration of a conventional 30 year mortgage - my money is on some areas becoming un-investable.