I have a great privilege of speaking 1 on 1 with a seasoned investor who lives and invests in my area.

You still use the deposit for damages, but if the deposit doesn't cover it, you have the extra rent to defray costs and you still go after the Tenant for reimbursement.Be very clear that fees are for administrative costs or the privilege of having animals in the property; they are not deposits and are not applied towards damages.

I also route buyers away from neighborhoods where I know there is subtle resistance, such as a few pockets in Scottsdale where homeowners have planted "Homes Not Hotels" signs in their yards.Having said that, there is a lot of hoopla around regulations, but when it comes time to make changes, cities have only imposed minor inconveniences, such as registering your rental to ensure you are paying transaction privilege tax and posting the name and number of a local contact who can be on the scene to respond to any noise calls made to police.Whenever there are any campaigns to limit rentals, STR owners show up at the state house to defend their property ownership rights, so regulation attempts have been limited to the kinds of overlays I've mentioned above.No one wants major party houses in their neighborhoods, so choosing your tenant type wisely and setting your STR up in a way that doesn't accommodate huge crowds is a hedge against attracting unwanted attention.As far as price points, while there are a few condo complexes that allow STRS, the majority of STR buyers are purchasing SFR with pools to maximize their revenue.

Don't forget you will have to pay for things like well/septic or just the privilege of hooking up to the public water/sewer. 

Your principal will increase as well, so your monthly payments will increase.You get a large chunk of money, but you don't immediately have a deal to spend it on, so it sits in the bank, making 0.1% while you pay 5% for the privilege of the bank sitting on it.I'd like to suggest the HELOC.

Appreciation and tax privileges hold much value as liquid gains. 

Not everyone is privileged with a high paying W2 job.Just my 2 cents on the subject.

They've literally voted for this for years by making it difficult/expensive to build in certain locales, flooding trillions of dollars into the market, suppressing interest rates so we're a country of cheap credit junkies, creating a class of American that sits somewhere between a renter and an owner with rent control laws in that they have ownership privileges in every way except that they don't actually own the property, etc. 

If you take $25k out at 4%, you are now paying $1,000 a year for the privilege of being proud of your deal.  

You have equity in it that should be moved to a property that does CF positive.Would you work another job in addition to your current one, and pay your employer for the privilege of doing so, just because you make enough money in your current job to cover the money you're paying your new boss?