Taxes on Rental of Partial Primary Residence

[Luke Predmore]

So I bought a house that has the basement completely converted into it's own 2 bedroom apartment. It has it's own kitchen and everything, with their own entrance. Currently, I am allowing a friend to stay there for a few months, then I'm considering using it as a rental property.

What I'm trying to figure out is what my options are for tax reporting on this. Me and my fiance have looked into possibly starting a business and having the income be for the business, instead of it being personal. Long term, we would like to have several homes that we rent out as a legitimate business. This would just be our starter.

Could we have the tenant pay the rent to the business and have the business paying towards our mortgage? Could we even just have a tenant pay directly to the mortgage company? I have a friend who said he does this with his tenants. He has them fill out a direct deposit page, and then he puts it into his mortgage and just has them pay into his mortgage. That way it doesn't count as income since it never passes to him. Personally, I think that's a little shady and not sure if that is actually right. I just know that with real estate there are lots of options. And renting out part of a primary residence seems like a niche thing that is a little confusing.

Please only respond if you really know the answers or have personal experience with this. And thank you in advance!