After all PITI, utility, and services (lawncare and cleaning) costs I have $7,225.I set aside 25% of this for my maintenance fund.The remainder funds my lifestyle, wife has a Tesla, and quarterly vacations as well as business growth.In 2023 I am tracking to build 4 duplex units designed as room rentals funded in part from a recent land sale.

Is it realistic to pass material participation test if the property located far from primary residence, like vacation rental?

It may even eat into your vacation.

Skip the vacations, skip eating out with friends.  

Of course OBX is 100% vacation destination only being no industry or jobs outside hospitality.

The good thing about househacking a legal multifamily unit is that lender allows you to use the vacated units of 75% market rent as an income to offset the potential current mortgage.

You're in an incredible area for long term rentals and vacation rentals.

A place that the family always thinks of and goes to for reunions or vacation? 

Year leases offer consistent income (less chance of vacancy), and tenants can plan to vacate after a year.

I have a vacation rental townhouse in Rehoboth that I tried to rent for the winter months last year on FF.