I am wondering if transferring the cash periodically to a standard brokerage IRA account may be my best option.

I think it will increase down the road, but right now the town is a bit on the past.

Largely, the appreciation in housing prices is coming from both new migrants and investors coming from the East (GTA) as well as international countries (predominately from the middle east).We are also seeing drastic increases in the rental rates which in turn are pushing investment property prices up as well.

Materials have increased more than 20% in the last 5-8 years.

But once I got the bills, I increased the rent with the tenant's approval and signed an addendum to the lease stating the rent increase would be X and the owner would take over utilities.

Just make sure you are saving towards those slow months during the peak months, buy a deal at the right price (don't overpay just because its a turnkey STR or you think it will make more money than projected), and look into ways to increase bookings during those slow months with some marketing and operation tweaks. 

How do SFHs fare in competition with these rentals as supply increases?

That may increase your cost or limit the coverage you can get.The Year that the following were updated (either partially or fully) would be good to know:- Heating systems- Roof- Plumbing- electricalSome companies will not write properties with systems that have not been updated.As long as you are living there, the proper policy for a 1-4 family is a "Homeowners" policy.

Its a standard excel model that can be found with a little googling.

My initial thoughts when it was mentioned, was to push him more to a standard multifamily investing strategy.