A lot of lenders used to apply 35% for expenses, but in the last several years, the numbers for supplies, labor, utilities, taxes, etc… have increased significantly.Also take into account the age, occupancy and how has the property been maintained, this will affect the expenses too

@Tom GrieshammerThe best bang for your buck would be buying an existing duplex with an owner-occupant loan and putting down 3.5-5% and live in one unit.

My big question is around the occupancy rate.

@Bradley Buxton makes a very good point to make sure to do your due diligence as you won't be an owner occupant like your in-laws.Last bit of advice: Because this is a friendly deal, you want to take your time to make sure you structure it in a way that maximizes tax and cashflow benefits for both parties. 

We average 90%+ occupancy so most investors do not actually take this deal. 

For an investment property (purchased as an owner occupant), that is insane. 

And it doesn't seem to spoil the charm for couples on a romantic getaway.We've been able to raise the nightly rate 2-3x with better occupancy. 

You can find out nightly rates, occupancy and amenities.

It gives you insights into occupancy rates, average nightly rates, and revenue potential in your target area. 2.

It's a very expensive repair (ballpark $15,000) and the cost depends on how long the sewer line is.A lot of municipalities here require dye tests and occupancy inspections.