Whats the loophole to offer compensation legally? 

If the water bill is $100 a month, increase the price by 20% (or whatever you decide is fair) to compensate you for the time required to split and bill and to cover additional use when tenants squander the utility.

(I am getting pretty tired myself sounding like a broken record).Direct mail marketing works SO poorly, you need to send THOUSANDS of mailers, AND you need to send these thousands of mailers SEVERAL times to get a deal.So:BECAUSE the performance is SO low you need to send thousands to COMPENSATE for its poor performance AND hit the receivers several times BECAUSE the performance is so low to get a deal.Conclusion: "Direct mail marketing works"WHAT THE HECK?!

They should be compensated for the cost of a place to live.

Again, other might feel differently here.b) Skin in the game: as a conservative investor, I understand that the dirty secret of industries that the waterfall compensation is in the line with me and incentivizes sponsors to take more risk.

They even pitched that I run marketplace adds for my property and refer homeroom (and if a lead goes to another property in the end, I do not get any sort of compensation).

And if your LT tenant needs to assist with things now and then, be sure to show appreciation and compensation of some sort (I've offered free wifi, though my tenant prefers their own internet/cable).3) I haven't had any issues, but maybe avoiding carpet and low rates with single night rentals that ends up attracting homeless guests.

If so, is there a way to get some compensation for giving them this depreciation? 

We are working out how to fairly distribute the cash flow so everyone is compensated.

I suspect you've fallen victim to this.