If there are attractive MF deals there now, I would say jump on it.

Realistically, most families want to either be close to the base, or close to some tourist attraction around, so I bet you would find more success casting your net either at, or between those two things if that's the kind of fish you're trying to catch.

I want to grow and scale the business to be more passive, which is why OOS is attractive even with lower returns and appreciation.

Alternatively, I saw bungalows in the neighborhood have added the second bathroom in the basement.

If you can't attract tenants to an area, it's tough to get home buyers. 

It can be great because it's typically going to attract higher income tenants (which some people prefer), and there are typically less maintenance issues. 

My broker presented me with an alternative approach of seller-financing which has a very similar outcome - same down payment/option fee, same monthly, no deed.

Hope you find a better deal 😁Would be great to get an update on what kind of deal you ultimately come across as an alternative if you wouldn't mind.

Alternatively, a PM might be a good idea. 

Alternatively, give the tenant access, but explain that as it wasn't part of the original lease and there are increased costs (water, electricity and the machines), if they want to use it, there will be a small increase in the rent (assuming they are month to month) or a monthly fee if they are on a lease.