My capital is limit FYI so that’s one reason why the 3.5% is looking like a solid choice for me (now).

Because of small life choices like that and learning those things early on, it's allowed me to see that I'd rather put the money I would have spent toward a car back into investments so I could buy 10 4Runners if I wanted to (which I won't lol).

You choose one OR the other, not both, and the choice is something that needs professional help from real estate tax experts.

Cash-out Refi with your lender of choice.

If hands on is your method of choice, I personally would be looking into properties with abilities to add ADU units and rent them out on your own or with an agent.

However, if your why is actually that you want to build long-term wealth and passive income, you may want to rethink your strategy of choice.

Formica For a rental it's the better choice.

I believe these systems would accomplish the following:1) Allow you to put the cost of heat (and A/C) on the tenants.2) Offer the tenants a less expensive solution than electric heat.3) Offer the tenants relatively efficient A/C as compared to the cost to run window units.4) Cost you a heck of a lot more than electric heat in regards to your initial capital outlay, but I don't believe the maintenance cost is much.This is just an idea that I know has been gaining popularity. 

"Condotels" are popular in some parts of Florida, where every condo in the complex is available to rent on a short term basis and sometimes (as an owner) your HOA fee will help cover the cost of the HOA to manage the listing for you.

That said, the stress and change of a move may not be the best choice right away.