My goal is to have passive income!

@Sean OvercrestThe transaction that you've proposed has several different tax implications: income tax, gift tax, estate tax, and yes, property tax. 

If your income is high enough that you won't qualify for financial aid (or you've saved enough in 529s) then it won't matter.

If the income requirements are met, credit looks good, and employment history ( at least 6 months +) at the same job, move forward with the applicant and request additional deposit.That's an old eviction IMO.I have a current tenant that I leased to with low 500 credit.

Would that lower our tax liability from other income we receive or no because this is purely RE and not an operating business?

The key is ensuring the property can generate enough income to cover the payments and any renovations you plan.As for pulling out equity later, this depends on the agreement terms.

@Curtis OsaweyStarting with Section 8 housing can be a great strategy, especially since it provides consistent rental income.

The only thing that makes these properties turn key is the fact they are move-in ready for a lower income tenant with low expectations.

If the property manager uses a payment app integrated with the property management software to collect rent for the landlord, this is not gross income for the property manager.

That question depends on if you have enough other income to qualify.