That way if they cause a loss, their insurance covers your deductible. 

Same as if it was bank-financed.However, make sure that you can in fact reduce your taxes by rental losses.

It doesn't make sense to hire an attorney for $1,500 when I can do it for $300 and make the tenant pay the costs (or eat the loss).It's also important to understand the PM process.

A few things I do personally for clients is: create a P&L, market to my buyers list, pre-market the property online where the target audience is, and make a plan for bookings and the booking calendar to minimize losses while up for sale and operating simultaneously.  

By the time we paid the legal fees to our lawyer to do the conversion and the reduction in the balance of the loan took a major loss. 

The 8 to 10% is worth its weight in gold. 

You can also use bonus depreciation on the entire property, but only the STR-related losses can offset your W-2 income.

It took lot of money and we went overspending on the property more than the appraisal value.If we sell the home we will end up in loss.

Sure, but you also wouldn't be incurring the loss (i.e., expense) of you staying there at the same time. 

One hurricane, one downturn, one localized series of job losses, and the house of cards falls.