That has been a great strategy for years. It works especially well for parents who can put a college student on the payroll. Well capitalized REITs have gotten in on the game also. The growth of student housing around several universities I'm familiar with has exploded. My biggest concern with these niche markets is how rapidly a move against the niche can wipe you out. Reduced in class attendance as major universities continue moving classes online poses a huge risk in this area. Another previous "money printing" niche market was converting large homes into assisted living facilities. More people are opting for at home care. The VRBO niche has been hot as well, but that industry doesn't have the political capital to compete with Marriott, Hilton and Hyatt. Legislation and HOAs are slowing down that once hot segment.

There are sliding scales of capital and time that investors can use to find their fit. Many of the niche markets are fantastic for investors with higher time to capital ratios.

Lots of real estate investors get stuck in their niche and don't have a plan to scale. You can double from one house to two or 5-10 pretty easily. Above that, it gets progressively more difficult. As capital grows, time remains finite and you have to find ways to scale. Generally that means having a geographically concentrated income source. 50+ unit apartment, 300+ unit self storage, X+ unit RV park, a couple dozen homes in a 3 mile radius, etc.

The most successful investors I know have successfully scaled out of houses and into larger commercial property. Some have scaled by deploying their growing capital into passive deals rather than taking on more employees or tenants.