We are currently trying to buy a property in North Dakota which will be an investment property for us, but my mother-in-law will be living there.

.* FHA loans require both parties to owner occupy for 1 year* A 203k loan is not a first time buyer program, you can own a home and still use the program as long as you live there* The loan must be made to a person, not an entity. 

What is their incentive to pay the rent at a location they are not living in?

The tenant has lived there for almost 25 years, even before I acquired the property.

Because I live in a neighborhood that has no crime but it shows up as very high crime because we had two neighbors who would call the cops over each others dogs barking so it lit it up to show it as negative…

I live about 2 hours away.

Think about it: most of them are able-bodied adults who choose to live (mostly) free off the backs of others rather than contribute to society.Rent payments are usually steady, but Section 8 tenants took a lot more work upfront, throughout their tenancy and at the end of their tenancy.

You will live there for a year, hopefully get some equity so that when you refinance into a conventional, you can cash out, but in this market that is pretty unlikely.

Would this be something where your daughter would live and 1 or more of her friends would be roommates?

Lenders will allow parents to be a non-occupying co-borrower on a home your college student plans to live in.