I'm planning to turn my house over to a property management company as a rental in a few years. I'll have the management company expenses, but the proceeds should still be able to pay for the rent of a small apartment in a lower cost area. By then, I'll be retired and won't want to maintain a house and yard.
Your plan sounds great. We've been thinking about this also, but we have a large house in a sought-after area, which would make it hard to rent the whole house (the rent would be a house payment and most people don't want to rent in our area, they'd rather just buy, I think). We've been thinking about whether it would make more financial sense to keep the house and pay it off quicker by renting half of it (which would mean we could charge a cheaper rental price but still make a good chunk of our mortgage), or just sell the whole thing and buy or rent something smaller like a condo that doesn't have the maintenance issues you mention, and invest the rest of the money. Hard to decide for us.