Purchased home with potential upside in hoping to force appreciation in the house in order to create equity and eventually utilize the equity (HELOC) to begin investing in other properties.

Under this idea, you'd need to see if the Health dept has any restrictions for your septic system (which i assume you have) and if the power company would meter the 2nd unit separately. 

Portfolio = Income derived from financial instruments like dividends (including REITs), interest, royalties, and capital gains.Mostly income w/out loss potential, and favorable tax rates.Cap losses may offset cap gains w up to $3,000 loss.

i keep seeing:1. buy out of state rental in a solid neighborhood with long-term potential (just as you are recommending) but then...2. have one rough tenant turn that costs a couple grand, and3. give up on real estate investing, and turn on everyone involved in the transaction for not guaranteeing that sweet cash flow in month 1 lol, yea there is a decent chunk of investors who get really butthurt by that one bad unit turn and just give up.

Keep in mind, the region is immensely sought after, leading to notably low capitalization rates.Positive cash flow from a rental property becomes challenging; however, there remains potential for substantial returns through appreciation.

And we're still seeing deals here that are positive cash flowing with lots of potential for appreciation.

Is it overkill for a potential non-problem?

That neighborhood is buzzing with potential-young professionals, trendy developments, and a rental market that’s always in demand.

All that said, and to answer your question, I think a guaranteed check for 66% of the rent offers some peace of mind and limits potential loss. 

Over 1 month with 124 Zillow potential tenant contacts, the property manager report showed no leads from Zillow and couldn't find tenants.