Also, heading into a likely recession, learn everything you can now so you’re ready for the alternatives if life forces you to choose them.

I don’t see this alternative interest to be cheaper than simple interest so I’m going with option 1.Option 2 is more attractive if the project will exceed 6 months.

These may be items such as special flooring, lockers, decorative trim, special cabinetry, Computer equipment, wallcoverings, window treatment, etc.

At $3.00/foot not installed I can't imagine this being a better alternative than actual carpet.  

I have a tenant in a SFH that is responsible for lawn mowing, but there's zero outdoor storage.
I don't want to build an entire shed. Any advice/links to cost effective products that would shelter a lawn mower?

@Curtis LipseyI'm far from an expert and can't answer your question directly... however my limited experience might be useful to help you think from a slightly different perspective... alternately you might get inspired.I retired from the AF a couple years ago... and purchased a house at every stateside assignment.

I don't think you should take it upon yourself to help your tenant find alternate income.

And we haven't even touched on the favorable tax treatment of rental real estate vs. the stock market. 

Like others have said, sellers are no longer getting the "as-is and take my firstborn" treatment - I've seen more price drops and seller concessions than ever before!

The mini split heat pumps won't work very well below 32F, you would need an alternate emergency heat strip of sorts to back it up.