Or explore a 40B lottery condo purchase and look into house-hacking.

This approach could keep things straightforward while accommodating their need for housing.

I would keep rent a little below market, then split the monthly bill between the tenants on top of rent.Old houses in cold climates get expensive in the winter.

Based on an inspection report on one of the deals I worked on last year, I was able to negotiate over $15k of credits and repairs for a $200k house using a $400 inspection report for one of my clients.

If you only have a homeowners policy, and something happens like a fire or a guest gets injured, and the insurance company finds out you're renting out the house, you're in deep trouble. 

It’s a 2/1 main house with an attached 1/1 unit, sitting at roughly 1,800–2,000 sq. ft.

I have a house that’s a long term rental upstairs and a medium term downstairs.

Save up more capital and buy an investment property or just house hack for a year. 1 year really isn’t that long and flies by pretty quick.

Are you planning to sell the house after you finish the rehab or rent it out? 

I assume a higher upfront cost as far as land purchase and the actual build but you would have a brand new house, instant equity and hopefully maintenance free for quite a while.