Based on the 1% rule, this doesn’t seem to make sense.However, the city and area we live in retain property value because of the schools, community, and location.

It’s crucial to set those expectations early on to avoid surprises.

So outsourcing some degree of property mgmt would be a must... but the deal won't work paying a local property manager a large % of my revenue...Instead, I would set up my "boots on the ground" (cleaners, handyman), and would need an offshore virtual assistant to manage guests and coordination of my local team. 

The latter will typically cost you more, as there are two sets of closing costs and the front side will pass their cost on to you, so you pay twice essentially.

I'm up to date on Portugal's various STR restrictions.  

Since you're focusing on Worcester, try pulling up some local property listings and practice running the numbers on them.

I asked if they would consider seller financing on the property and they said, “yes”.

Should I be visiting, asking neighbors questions, getting a feel for the neighborhood and home (in person rather than just off of online research) before buying or making offers? 

We are concerned that the new interest rate will create negative cashflow on the rental.

Feel free to reach out and can give some recommendations on agents and PMs here in the market.