Normally I attempt to structure the transactions utilizing an interest only 3-5 year ballon payment (balance due in full). 

Hopefully, you have a clause in your lease that states the tenant must return the property back to you in the same or better condition as they received it.You may be able to use this clause to warn the tenant to smoke outside or face damage charges as smoke damage is not normal wear & tear.

Normally, they would have zero tax because of the capital gain tax exclusion on primary residence, known as the Section 121 exclusion.

I find it odd that they'd pay rent several weeks in advance (assuming it is for Aug 1) as first month's rent would normally be due when they moved in (and before they got the keys).

Seems really normal...

As long as you will be occupying the house, the normal policy to cover it will be a Homeowners. 

That's very normal.

The regular straight line depreciation is fine, that receives the normal treatment. 

Sometimes your credit or the deal itself might change things so without knowing EVERYTHING about you (which would be hard to do in a public forum) it might be hard to really say what's "normal" for you.  

The Excess Liability only follows the form of the underlying policies listedYou may have difficulty getting the umbrella because it normally covers over the Auto and Homeowners Liability as well.