Perhaps do a case study with a hypothetical deal you think is typical for what you are looking at and compare it to the alternative investments you might use and their expected returns.

You just hold it, keep it occupied and well maintained, and let the years roll by. 

.• 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?

In addition to other tax strategies like a cost segregation study on the fully rented out house.

I'd love to learn more about investing in hotels and this type of properties, so please if you have any books/documentaries/any type of resource that I should definitely study before I venture in the wild, comment them below my post.Thank you so much in advance!

Regarding a 1031 exchange, while the property was rented and treated as an investment property during your deployment, if you maintained it as your primary residence for tax purposes, it may complicate eligibility.

Tenants in many markets already believe they pay too much (contrary to recent studies that show rent to property values have never been lower for the large US cities).If my insurance costs are not double my current rates over the next couple years, I will be pleasantly surprised.  

Maintaining a financial track record for your project is facilitated by effective budgeting.3.

California maintains a “List of Approved Surplus Line Insurers (LASLI).”

Quote from @Aaron Zimmerman: I would look for other ways to legally reduce income such as cost segregation studies.