You could try to negotiate a higher rate per year after that 5 years to built into the loan incase the economy is somehow much lower then opposed to now.

In areas like FL, Smokey Mountains, etc. they depend almost entirely on tourism for their economy and there is a LONG history of families using homes vs. hotels for their stays.

Many aren't solvent or on the verge of bankruptcy because of poorly underwritten deals and using too much leverage.The interest rate and inflation fluctuate, the economy changes.

If one market experiences a downturn, others may remain stable or even thrive.Higher Potential Returns: Some out-of-state markets may offer higher potential returns due to factors like lower property prices, higher rental yields, or stronger appreciation rates.Access to Different Economies: Investing in diverse markets allows you to tap into different economic conditions, potentially capitalizing on areas with strong job growth, population expansion, or industry booms.Specialized Opportunities: Certain markets may specialize in specific types of real estate, such as vacation rentals, college rentals, or luxury properties.

Both of my properties are in the city and fall in the economy STR category, and my dream is to pivot into the luxury STR space. 

Do you think the the economy is on the upswing or downswing?

Strong economy, a couple really thriving developing areas, the mountains.

This leads me to why I am getting a little more cautious when it comes to the overall economy.

,   You might make a little more profit in the $250,000 lot, but your risk, timeline, experience, developer, economy risk is far greater.  

Can you please share your thoughts on area in terms of appreciation, cash flow, and future growth in area (economy, rental demand etc)?