The interest rate on the HELOC is 8.5%.   

You should look into DSCR Loans - many investors like yourself typically move to this loan product once they max out with DTI/qualifying conventionally - a bit higher in rate than conventional mortgages - but no DTI ratio or tax returns/income verification makes a much easier qualification process and LLCs are 100% ok (even as sole owner) and actually often preferred.PS - published a 10-part article series here on BP last year on everything you'd want to know on these loan types - sharing links below, hope it can help!

Can you easily see your occupancy/vacancy rate at any moment?

The main draw back is the funding fee. 

Rates are competitive but you could potentially get better terms

Last year when interest rates caused everything to slow, our average price/sqft only went down by 0.004%.  

First and foremost- why not just get your rents up to market rates? 

The option fee should be enough to create an incentive. 3% to 5% are common.2.)

While I understand that current CAP rates have not necessarily adjusted to the new interest rates, which might be some of the issues.   

In today’s high interest rate, high priced homes market, just trying to find descent cash flow is seriously challenging.