It seems most commercial lenders base loan amounts on rental income rather than the property’s value.

Big military base and probably lots of border trade if that continues.

The Cape also in my opinion is oversaturated with STR's so it's challenging to find a base number of how your property will perform. 

Based on your assessment, it feels like the only way for you to buy something now is to make a compromise that you don't want to make or to get out over your skis a bit more than you'd like. 20 years from now, it won't make much of a difference whether you bought something today or two years from now. 

All in all - owning a place to rent to other people is a business, and business decisions need to be made based on that cold hard facts and not on an emotional basis, unless someone wants to quickly go out of business.

How about the simple obvious that the inputs to deliver the service/product have a base-line and market prices have, OBVIOUSLY, been at about as lean of operating profit margins as can be. 

The only good use I can see of the fees are based on rent charged would be for a tenant to purchase it and charge themselves $0 or near $0 rent to avoid the rent based charges. 

Here’s some feedback based on your situation:House hacking is a fantastic way to reduce housing costs while building equity.

If it were me, I’d double-check the furnace to cover all bases (maybe bring in a second opinion) and document everything.

Hey Meena - I am based in Austin as well.