But, it's a unique strategy that requires more knowledge than expected.

Proximity is a plus for managing the property, but make sure to run detailed numbers to confirm the cash flow and long-term potential align with your expectations.

They also each get a roll of toilet paper and are expected to self re-stock.

Do you expect it to appreciate?

Just trying to get a feel of what one can expect. 

Insurance would cover it, I would pay the deductible, and no assets would be lost.If you are in an area like San Diego where people are more likely to sue, a judge is more likely to find you guilty, and the payout is expected to be higher, you may consider an umbrella insurance policy.

If you work with the same lender that may speed up the process but expect a typical 30+ day closing.

However, they are still expecting Covid real estate prices. 

I would NOT remove any money from index funds as I expect those to be a great earner into the future and very steady hedge against other avenues.

Looking for ways to create more passive income for myself.I guess an additional question is how profitable should I expect a short term rental to be in that area?