Purchase price: $160,000 Cash invested: $35,000 Purchased this property as a turnkey investment at the 1% rule moving equity from another deal.

(In other words, I won't be creating a profession out of REI.)  

Sounds like you're in the scale/harvesting time so I think you need to determine if this property is something you are happy with the cashflow it would produce as well as the time needed to manage it or hire a property manager, or is it time to take the equity and redeploy it into something more worthwhile like a higher cash flowing investment or creating higher equity in the home you buy down here.

Reporting begins when it's placed in service, not when it’s first rented.This post does not create a CPA-Client relationship.

Quote from @James Hampton: That's a bad practice to follow.If an occupant is not named on the lease, you may have difficulty enforcing rules or evicting them.

The issue I see most is the cashflow gets crushed by HOA fees and the added headaches of having them tweaking rules etc. 

My out-of-state clients love it here because you can still find cash flowing deals hitting the 1% rule with lots of appreciation potential.

It’s a great way to meet local demand while creating steady cash flow.

Do you guys still apply that rule? 

If you create or fund an IUL instead of paying cash you can then get a loan on the IUL.