Connect with @Stuart Udis a wealth of knowledge and based in Philly 

The 1031 is not a bad idea again it would yield 2-3 properties based on down payment and closing costs.

So, if you plan on using it as your primary residence you may be able to "inherit" the low property tax base value, but if/when you stop using it as your primary residence, it can be reassessed to current market value.

We now have them come semi annually to do routine maintenance so we can get the 25+ years out of it4.) both octopus furnaces we have replaced were both wrapped in asbestos so replacing them was best for the safety of the propertyI would also suggest when talking to HVAC reps to ask if they are commission based or not, that’s a good indicator as well if you have the means to be a self fixer that’s great but not sure it’s always the best and easiest approach 

Plus garage, and fully renovatedMy question is should I be looking at this purely based on cost/sq ft, or should I give a percentage value to the property it sits on, then assign a percentage value to the structure itself to figure out the fair market value?

I've looked through recent sales (trailing 12 months) to determine similar cottages with similar lakefront amenities, and although none are as small (most are 1000-1500 sq ft), I determined what I feel is fair market value based on cost/sq ft.

These properties don't really have negative cash flow, except when evaluating based on the asking price.

@Stevie Nosekabel is your company based in Ohio or based here in Texas?   

Also using a percentage of revenue is inherently flawed, I assure you that whoever you have doing your maintenance or improvements will not base their pricing on what you receive in rent.That said I understand that some we need to have some convenient way of budgeting for these expenses.

The real question is how much interest rate and how many points based on your specific profile, which will become clear when you provide all your information to a mortgage lender?