That is REALLY bad news because dryers generate a huge amount of humidity and those damp spaces are an invitation for mold and wood-rot problems.  

How bad an idea is building for your first investment property? 

Keep the good let go of the bad. 

I would think most landlords, who choose to be landlords in very Tenant friendly San Francisco, would pony up the 5.2% knowing that the rate has gone up and down throughout time, unless they want to run the risk of their tenant's finding out and called out as being a bad landlord, being taken on by the very helpful San Francisco Tenants Union or taken to Small Claims Court.Maybe there is a silver lining in California's recent change in security deposits that limit it to one months rent when it used to be up to 2 month's rent for unfurnished units and up to 3x for furnished units.By the way, I took a look at your Company, https://www.getwhale.co/  Since your firm is only offering 4.2%, were you trying to market in San Fran before discovering the Rent Board rate?

The area I'm in is very rural so id have to develop a plot from the ground up and have a lot of up front costs id imagine.Saving is never a bad idea. 

We don’t know any PMCs to recommend in the area mentioned, but since selecting the wrong PMC is usually more harmful than selecting a bad tenant, you might want to read our series about “How to Screen a PMC Better than a Tenant”:https://www.biggerpockets.com/member-blogs/3094/91877-how-to-screen-a-pmc-better-than-a-tenant-part-1-services-and-processesWe recommend you get management contracts from several PMCs and compare the services they cover and, more importantly, what they each DO NOT cover.

Our slow season is months with some of the best weather IMO and people come here to escape bad weather further North.

Honestly, I'm using credit karma, for me it's actually not that bad.

What about the financing was bad?

If that is the case, this will be treated as a disregarded entity so no real tax separation or tax benefits I am aware of.