>Do the local laws allow short-term rentals for off-grid cabins?

Find a lawyer and issue a lease violation for other issues such as excessive noise and furniture removal.

The issues can be local so look for someone in your area who is posting and try to contact.   

Shayan,Best option to avoid issues and stay risk free along with having a better approval chance would be to go with a Cash out refinance.

We are good friends but that's also not an issue for them because they are a dual veteran couple.

Obey TorahBest, Larry Cheshier That’s interesting Larry but the issue becomes interest rates to borrow the money wouldn’t make this a valid choice.

I've asked my clients a similar question and have developed tools for them to minimize this, but I find there are a few different types of clients.Manager managed - these folks have no issues as they simply upload their year end statement from their property manager, their 1098 mortgage statement and any other one-off expenses they may have paid for outside of the management company. 

We have become good at it, by simply issue a 3 day letter to pay rent or quit.

New Jersey state law allows for owner occupants to have much more freedom. 

It provides an opportunity to see what's happening in the units.You still have the ability to evict for lease violations, but your less likely to face non-payment issues.