As I mentioned every person and their criteria is going to require a different loan program and each loan gets risk graded based on several factors.

One of the major driving factors for increased premiums is the carrier's requirement for higher replacement cost limits on file for buildings. 

That means their pricing tool is designed to price beneath the rest of the market, which drags the entire market down, especially when combined with their algorithm changes a couple years ago that made pricing (IE lower prices) the #1 factor in ranking.Even if you use an external pricing tool, it gets dragged down by the people using Airbnb's pricing. 

Additionally, have a clear budget, factoring in potential repair costs, and ensure you understand the rules about earnest money deposits and closing deadlines.LLC for Real Estate Investing: Forming an LLC for rental properties can offer liability protection and may provide tax advantages, though the tax benefits are non-existence for rentals.

There’s also a scorecard that gets released based upon many factors.  

A local couple who’se combined income is 300K and who sponsored the family’s immigration to US is willing to be co-signers for the family of 5.I am thinking that Party2 will put more miles on the house and may be harder to deal with in case of any complaints or eviction, though I am not an experienced landlord so I am not sure what are the factors to evaluate or what all can go wrong?

.• Use some equity from the sale to make this transition smoother.I’m torn between maintaining our current home as an asset and buying  a new smaller house to use as a rental after we move back in versus simplifying and focusing on a single upgraded property Considering factors like market trends, potential equity growth, and quality of life, which path do you think would be most beneficial?

Another factor is that insurance coverage is only for the actual building cost to rebuild the structure.

By the time you factor in insurance and any cap ex....it's already a loser...even if you aren't carrying a mortgage.  

As others have said, the location is a big factor in MTRs, but so is the clientele you are going after.