The problems I see are:Rent is a low percentage of the house value, so not optimal use of this equity/capital.Property taxes are high due to the higher house valueMy costs would be a baseline of $2700+800 = $3500 plus maintenance, unoccupancy, etc. so basically breaking even cash flow for 12 yearsIf/when we sell it, we'll owe capital gains tax since we wouldn't have a "new" house to 1031 into.

I am also thinking about investing out of state since home prices are pretty high in NJ, and it seems finding cash flow is a bit tough around here.

I highly doubt the department of RE in WA would do anything with this.

Very high probability that sometime in the future you will need to put those fees towards the lawyer fees / collections - unplanned turnover, etc., 

I see many people saying oh it is just $100 but as I said it adds up pretty fast and in reality, it is way more than a $100 difference as the price of insurance is going up very high.

As mentioned already I highly recommend keeping up communication with investors to ensure that you are both aligned on the deal.

I think the high-risk tolerance is only going to last another 6 months or so.

I'm actually surprised it hasn't affected tourism more yet but that's probably because it's cheap and so it attracts price conscious tourists, especially in a period of high inflation.

I do not know every market in the US but typically speaking popular vacation areas which drive up rates also have high real estate values. 

:Class A Properties:Cashflow vs Appreciation: Typically, 3-5 years for positive cashflow, but you get highest relative rent & value appreciation.Vacancy Est: Historically 10%, 5% the more recent norm.Tenant Pool: Majority will have FICO scores of 680+, zero evictions in last 7 years.Class B Properties:Cashflow vs Appreciation: Typically, decent amount of relative rent & value appreciation.Vacancy Est: Historically 10%, 5% should be applied only if proper research done to support.Tenant Pool: Majority will have FICO scores of 620-680, some blemishes, but should have no evictions in last 5 yearsClass C Properties:Cashflow vs Appreciation: Typically, high cashflow and at the lower end of relative rent & value appreciation.