In areas with rapid and sustained appreciation, you can use the equity gained through appreciation to purchase additional properties.

Agreed - plus two additional thoughts:1) I always recommend having your CPA also review the drafted operating agreement for the tax issues. 

Our country needs four million additional homes.

In addition, as others suggest, guest damage insurance such as proper or safely would be good, for those bookings off Airbnb/vrbo where guest damage coverage isn’t available. 

If you have extra money that you haven't earmarked for additional RE I would do TSM index funds for a truly passive investment. 

I won't go into all the details, but there always ends up being a significant problem in the documents I get or don't get, in negotiations, etc, and the trigger never gets pulled.For a variety reasons in addition to the above, including my wife's encouragement, I've decided to take a serious look at going the real estate route instead.

They charge $1250 for properties under $1mm for a 1 to 1 exchange and if you have another property to move your funds into, they charge $550/additional property.

If you can add a legal ADU at $25k in the Austin area then you should add it.  

My budget is in the $200-250K range.Please feel free to let me know if additional details would help, and thank you in advance for your time and advice! 

I recently completed one on a multifamily property and found it to be a cost-effective approach.That said, there are a couple of additional factors to consider beyond the code differences between a garage conversion and new construction:Coastal Overlay Zones – If your property is in a coastal overlay, building a ground-up ADU may require Coastal Commission review, which can add time and complexity to the process.