It is best to run a new electrical line to the unit that has the water and only allow that unit to use the W&D. 

This will allow you give a reference point on how much potential rent you can receive.

@Eugene Lubman Selling the property to your parents allows them to generate passive income while enabling you to perform a 1031 exchange to defer capital gains taxes.

We don't allow anyone to stay even a day late. 

This could trigger the FHA 100 mile rule however with a few exemptions.Indeed, FHA allows you to put 3.5% down payment to invest in 1-4 units.

I know cameras are not allowed inside. 

Section 469(c)(7) provides an exception that allows qualifying taxpayers to treat rental real estate activities as nonpassive, enabling them to deduct losses against other types of income.

I'm all for being allowed to own guns and if it makes you feel safe fine carry one.

Do you allow pets?

I believe minimum is $40k they allow to be approved.