Heloc vs Cash out for investment property

[Amy Thompson]

Good Afternoon!

My husband and I are finally taking the leap and building a rental (short term Airbnb or medium term, traveling nurses, etc) on our lower property.  We thought this would be a good start for our investing journey a we already own the land and he's a builder.
Curious what route might be best if we have alot of equity in our home?  We plan to turn it around once done and refi again to hopefully build another rental.  We were initially thinking cash out, but the closing costs and fees are high and we're not sure it doesn't make more sense doing a Heloc?  I know these have variable interest rates, but no closing costs, is that risky right now with the rising rates?  Still seems like we'd be paying less in the end if we refi again in a year though?  Is there another option I'm not thinking of?  
Appreciate any input! :)
Thanks,

Amy