When it comes to reporting this income, beyond the importance of being truthful on taxes, a few key questions arise:Are there any advantages to reporting higher rental income on your 1040?

Do a cost analysis of how many months extra you can have until you break even.

The truth is, all rent is almost always entirely guaranteed. 

But remember that for studios, tenants typically would pay their own cable, electric and other utilities and maintenance, so the gap is bigger than just the base rent comparison.Our tenants have the option of paying an extra $10/week to have a mini-fridge in their room, and $10/week for weeks they want a window A/C unit.

Will they allow you to advertise “standard cleaning included…” So you can still charge when there’s a need for “extra cleaning”?

It seems like his day job is managing construction projects (for which LP's contributed money to pay his company to do), so why do they need an extra fee for this? 

What would be the extra steps to avoid any violation?

Truth be told, most will refinance their 5/7/10 year IO loan before it ever reaches the adjustable rate period.

Or is it best to work with an attorney and pay the extra money?

The reality is the opposite - if it's not in writing then the PMC doesn't have to provide the service or can charge extra for it!