How do you balance the risks of holding during a market dip versus the rewards of appreciation?

Exploring other options like Appfolio or Apartments.com which might offer the balance of support and functionality you need, is a sensible approach.

The current owner is letting me take over the property as a tenant as long as I pay the water bill and the mortgage payment on it and whenever I decide I can purchase property for the balance of the mortgage  they are in no hurry for me to purchase the home as long as the mortgage is paid. 

But balance is key—keeping some cash reserves for unexpected expenses is critical.Lastly, I’d recommend running detailed numbers to ensure the property cash flows well, even with conservative estimates.

Also, in regards to a per diem, I'd like to be a bit more optimistic that I can establish the right checks and balances to ensure that the contractor is not skipping corners.

If you are thinking about a new purchase with a heloc vs a current 30 year fixed rate, this could be a good alternative.Basically, helocs are billed based on the average daily balance of the account.

Aims for a balance between cash flow and potential appreciation. 

are areas worth looking into if you want a balance of family living and business opportunity.Texas PerspectiveTexas is a great market for long-term rentals, especially in cities like Austin, Dallas, or Houston, where population and job growth are booming.

Also, it's likely that a slightly smaller amount of each payment will go toward principal since the loan balance is higher and the rates are likely nearly the same once the MI of 0.5% is added to the rate.

You certainly want to vet your property manager to ensure they are focused on balancing asset protection with tenant satisfaction.