As rates go up, cashing out and refinancing is very unappealing.

Although there are advantages to waiting too, such as if interest rates continue to drop.

It falls short of the 1% rule which with current rates is not sufficient in most markets to have achieved real cash flow after properly allocating for sustained expenses. 

It keeps your asset, but rising costs and no property management may stretch your time and energy.1031 Exchange into WA: If local management and long-term appreciation in WA fit your goals, this could work.

I gotta say, I had a hard time deciding on the monthly rate and deposits.

I agree with most people in this forum that mid-term rentals are on the rise and gaining popularity. 

Competitive rates.

Mind you, with mortgage interest rates in the US being so much higher now (and seemingly for the foreseeable future), I wouldn't be surprised if LTRs in Europe would cash flow better than in the whole US nowadays (to be verified).This being said, I don't and would never invest in LT rentals outside of North America  as I wouldn't want to face unfavourable landlord/tenant laws as a foreigner.

And you'll have the best rate/points options with a primary residence.Option #2 is great, especially if you're willing to move into one of the units (because the down payment minimum is just 5% or 3.5% depending on program), but as you mentioned it's really tough here to find small multifamily here.

The environment now with higher interest rates and higher purchase price does make it more difficult but definitely doable.