So the units are larger than most 1 and 2 bdrm apartments available in the area and it's in a desirable area to live.

You always have the option of paying more monthly to pay down the loan if you desire but at least your interest rate will remain fixed unlike an ARM which will eventually change.

Screening for more desirable tenants Vs.

-Base your desired cap rate on other comparible properties, size and location.I got an SBA loan for mine and had to put 20% down.

So happy to have found you, BiggerPockets, as my learning platform.I desire to add value as I learn from you guys.

It may not be a restricted development, for small yards to be desired.

I just don't want to negatively affect our ability to get the loan amount we desire for our primary residence.

Outside of biking distance is much less expensive but desirability and rents drop way off. 0.25 miles (walking distance) - 2 miles (biking distance) tends to be the sweet spot, at least IMO and for my market.Good point made about flood insurance too, and that is NOT optional if you have a mortgage and rates are NOT negotiable, but set for the market ... become familiar with the map of flood zones ... if you can get just outside of the flood zone (depending on elevation as well as ocean proximity) and still in the sweet spot, then that'd be double sweet.As for hiring a realtor to fill it, manage it, and charge you a % ... depends on the realtor, depends on the %, and depends on your goals, availability, and willingness to self manage, but in a vast majority of cases, especially with a vacation type rental, it will most likely be in your best interest to self manage, at least in the beginning if you only have 1 property and little experience. 

It could be a real turn-off for otherwise desirable tenants.

Economic aspects are scarcity, modification or improvements, permanence of investment or fixity and area preference or "situs" which may include intrinsic values or satisfies other needs.Real estate is unique, drop back to your Economics 101 class, "factors of production" in economics are land, labor, capital and entrepreneurship. land is the only factor that can not be replaced as a factor or requirement to produce goods or services, all other factors may be substituted, if you have less capital, more labor may be used to obtain the desired outcome.