Now, I'm imaging a scenario when every one of these tenants move out that I'll be paying their entire security deposit + interest even if there are damages beyond normal wear and tear. 

Please consider this if you move forward.Additionally, you need to have a broker on payroll in illinois and three separate bank accounts with the security deposit trust account located in illinois.

This one I might take from the deposit, depends on how much if it is really worth it.

- Retainer/Deposit Fees – If you charge a retainer for mid-term stays, how much do you typically require?

Operations and Security Deposit accounts

If I secure renters and show a lease agreement and deposit can I get into lower interest rate mortgage?

Money was deposited into my account the day after checkout.

This method is simple, free, and fast.You could also provide deposit slips, so tenants can deliver their payment directly to the bank.

Loan Costs, Deposits, and Escrows: Origination fees, application fees, third party reports, legal, insurance review, title & escrow, rate caps (floating rate loans), due diligence deposit, rate lock deposit, standard escrows, etc.6.

Don't forget to tell the tenant where you will store their security deposit.