The drawback is more paperwork, guideline restrictions, and may require higher credit scores. 

Of course, with all things, the answers to all these matters will depend on the circumstances.California tends to have more laws on the books and requirements and restrictions that it can be a good idea to form a CA LLC for out of state property so that you as a CA resident are covered, and to try to have your contracts fall under the purview of CA courts.

@Nitin Gove check with the new builds what the guidelines and restrictions are for rentals.

Be aware of local regulations and potential restrictions on short-term rentals in the Tahoe area.Property Management: Decide if you will manage the property yourself or hire a property management company.

If the home is OK to be zoned for used mobile homes, you'd have to check on any restrictions (i.e. size, age, etc). 

When looking into it briefly, it looks like Mackinaw City, Traverse City, & Petoskey are the most restrictive on AirBNBs whereas Boyne City and Harbor Springs allow them with a permit, any information on how difficult it is to get one of these permits for an out of state investor?

I've stayed in both hotels and Airbnbs where they restricted how low or how high temps would go.

If you would like a structure that provides the same asset protection benefits as the Series LLC and spares you from the minimum of an $800 annual Franchise tax (per Series--OUCH) imposed by California, take a look at the Delaware Statutory Trust.

Though self-direct rules allow a broad range of investments, these companies restrict you to their stocks, bonds, mutual funds, etc.

I myself found myself on Fox news at 5 in the Chicagoland area because the suburb I was rneeting in wanted to impose laws they had yet to write on me.