It doesn't perform well; your neighbor is a nightmare, they put more regulations, you get tired of running it etc.It may not be your first choice, but it will be a smarter investment overall, especially for newer STR investors. 

I'm getting married in the next year and starting a family, and we plan to move out when that happens, which means that even if I went through the permitting process now and was granted a rental permit w/the town, I knew that ultimately I was going to find myself screwed when the time came to get a renewal on it (every 2 years), and I wasn't able to prove that the property was still owner-occupied.

My ultimate goal is to invest in affordable housing such as pad-split and section 8.

Start by reading the Ultimate Real Estate Investing Guide: https://www.biggerpockets.com/guides/ultimate-real-estate-investing-guide/introduction2.

Meanwhile hardly any emphasis is placed on the loan administration and even more importantly the relationship component of lending.Far too many investors, particularly those just starting out, are being conditioned to seek out the “easy” lending choice rather than invest time and energy required to cultivate meaningful relationships with lenders who truly value the borrower/lender relationship and are interested in assisting you grow.

There aren't many choices out as far from town we are. 

I ask because it seems like you have two clear choices - Either finish the rehab and sell potentially at a loss, or hold the property while renting it out so you can hopefully benefit from gradual appreciation and using the rent to help make any principle paydowns on any loans you may have. 

You'll likely have questions about local recommendations and events, which can be great opportunities to partner with nearby businesses.These partnerships can enhance promotions, generate referrals, and ultimately add value for your guests.

I currently own a home in Hawaii, unfortunately my family and I are moving and we want to make the correct choice.

Start by reading the Ultimate Real Estate Investing Guide: https://www.biggerpockets.com/guides/ultimate-real-estate-investing-guide/introduction2.