The idea is spreading, and could spread to some other spots here that have traditionally been STR friendly. 

-> Funding: you can consider as options mortage brokers who can scout/compare the best offers in the market and you can also consider public funding programmes that exists as an incentive to renovate and bring houses to the market, either for tourism or traditional rental.As an example, on the traditional rental there is a funding program ("Arrendamento Acessivel") that funds up to 90% of the project and can be used to cover part of the renovation costs, as well as, part of the purchasing.

I was planning on building the home in the traditional stick built style in my budget but am wondering if doing prefab may save some money/have other benefits.

.- The 203(k) will allow you to bid on properties that need repairs that won't qualify for a traditional mortgage => less competition => better purchase price.You will need to find a great local contractor you can trust to supply the required bids to qualify for the 203(k).- After closing, you can do some of the work yourself to save money, but the program doesn't allow you to pay yourself.You will want to buy a Class B property, maybe Class C+, in an area that seems to be improving.

With it being a difficult property for an investor to find traditional financing for, how would I go about assigning a realistic valuation for the property if we were to entertain a sale?

These lenders often have more flexibility with underwriting and may not require traditional income documentation.

While the traditional approach involves buying a multi family property, living in one unit and renting out the other - with rising prices and interest rates; others have considered renting out bedrooms as unit spaces. 

I've seen some pretty killer terms for foreign national Canadian loans from RBC bank, if they can meet traditional income qualifications.

I'm in a beach area where Sat to Sat rentals have been traditional for 100 years, but not any longer since the rise of Airbnb (and less control by local property management companies).

STRs in non-traditional vacation markets like Stuttgart or Wiesbaden aren’t t just about breaking even they’re re about creating consistent cash flow that also serves as a long-term hedge against inflation.5.