I’ve previously used my equity line, but I’m in the middle of remodeling and can’t use it now.

Unless you are hurting bad for a tenant, I would say no right off the bat, it sucks going some time without a tenant, but it sucks even worse when you cant get them out of the house and then they destroy it.

Then I’d list it occupied but I’d give the tenants notice now.

Also 4th quarter of last year Packwood and county officially did discuss potentially regulating STR's by either limiting numbers or adding a tax to cover increases in local services that are needed. 

I think it's doable but it's probably best to visit. 

There isn't enough information in here about the current state of the house to be able to advise you, but I would think #3 is a definite no as it seems unnecessary from a cost perspective although that market has scale to accept it.

Because it still livable, and doesn’t have any issues but plumbing in the basement needs to be jetted almost every 1- 2 years because of root issues. 

By no means cheap but solid rent + demand, fun place to live, decent inventory (relatively speaking), and is still commutable to the city. 

This means you'll get a good cash flow, but appreciation of the property will be low.In the phoenix area there is more ownership and less renting, but due to prices increasing faster than inflation we are seeing a rise in renters.

It was anything BUT "guaranteed $".