The most important rule is to have the cash flow of the new property be able to pay all its expenses, mortgage, AND the line of credit back.

It seems like the tenant is being respectful, following the rules, and is not being a problem so I think that is what you would tell any other tenants who ask, as long as you have seen the card.

When you have studied your market properly you should be able to provide the answer of if single family or residential multifamily is better for cash flow. 1% rule was for a time when almost all deals were decent as a way to rule out the lessor deals and concentrate on the best deals.

The rule is based on if it's "within the primary dwelling unit" of the taxpayer or not. 

The goal of a HELOC is a quick line of credit to either refinance or sell and pay back the HELOC as soon as possible.PS - I would recommend taking a look into the Columbus Ohio market, there's tons of 1% rule deals still within the 120-180k price point with amazing appreciation potential.

Additionally, the price point is still cheap enough to find the 1% rule and positive cash flow and there's amazing appreciation potential.

Once you go above $125k/unit you start to get into the high end areas that won't have very good rent/price ratios and are under the 1% rule mark for turnkey stuff.Neighborhood wise in the city the "East End" is where the most expensive real estate is since that's where the universities and a lot of the hospitals are located.

Are there rules about renting it out?

You can still easily find the 1% rule and positive cash flow and there's amazing appreciation potential.

The "land basis" cannot be depreciated, so your depreciable portion will be lower than $350k.We typically consider $1 million in building basis as a rule of thumb where it makes sense to evaluate the potential benefits.