I think that's bad for the new tenant's safety/security, and the house's security as well (think: disgruntled tenant returns to deface property).  

After registering, properties are inspected every 10-ish years confirm they meet basic maintenance and safety standards. 

It's nice to have someone being an active safety net but to get that you have to build the relationship.  

@Duanne Moeller  as for safety of your note position I would say that's about as good as you will ever get..

Tenants are extremely hard on appliances, it is not uncommon.Landlord Responsibilities: Landlord will at all times during the tenancy keep the premises fit for human habitation, and shall in particular:a.Cultivate, care for and mow surrounding grass, lawn, flowers, and shrubberyb.Maintain the premises to substantially comply with any applicable code, statue, ordinance, or regulation governing the premisec.Maintain the roof, floors, walls, foundations, and all other structural components in reasonable good repair as to be usable and capable of resisting normal loadsd.Keep any shared or common areas reasonable clean, sanitary, and safe from defects increasing the hazards of fire or accidente.Provide a reasonable program for the control of infestation by insects, rodents, and other pests at move in f.Except where the condition is attributable to normal wear and tear, make repairs and arrangements necessary to put and keep the premises in as good condition as at move ing.Provide reasonably adequate locks and provide keys to the tenanth.Maintain all electrical, plumbing (main lines), heating, and other facilities and appliances supplied by Landlord in reasonably good working orderi.Maintain the unit in reasonably weather tight conditionj.Provide facilities adequate to supply heat and water and hot water as reasonably required by the tenant

I have two huge problems with this. 1St is that we would never have rented to them if we had known we wouldn't have the deposit as a safety net.  2ND, I'm not sure if I trust the PM.  

In a sense, you get the best of both worlds, the safety and ease of cash when you need it and the growth potential of leverage when it makes sense.

Go down to the city planners dept and see what the city had permitted it to be.The additional unit may be unknown to them and therefore illegal until you can ask the city to grandfather it in as is or make the necessary safety changes to make it legal and insurable.

it is a great tool and they have endless amounts of information and community that will teach you all you need to know about budgeting and personal finance.The biggest take away and what I think gave me my freedom was always being a month ahead in income and having a safety net in savings.

Frankly if you have extra money you can keep that in the bank as a safety net until you feel comfortable enough with the income from that rental to then buy a second property.Most of my clients purchase with a loan but then as they generate income the revenue is put back into the property, through either improvements or paying down the mortgage.