I imagine the latter would help conserve water usage, but the prior is easier and some tenants don't want to pay for hot water but they could run up the bills at my expense and I'd have to wait 1yr to adjust usage.

Generally most private money lenders are going to play a lot more conservative but be able to close faster/make a faster decision on lower risk deals. 

Conservative debt is a tool to generate higher returns and build wealth.  

I recently renovated my childhood home while being my mom's conservator during her illness and I fell in love with the process.

I was told by my lender that these costs should come down more as some of the title fees are conservative estimates at this point.

I'm taking a more conservative approach for now as I'm inexperienced and need to be prepared for any unexpected costs, Thank you Nathan:).

I just would like to be conservative because I don’t want to end up in a situation where we are losing money instead of making it. 

The house would be considered a capital asset, so to be conservative, I would estimate 20% of the gain for tax, plus an additional 3.8% for the net investment income tax if your total adjusted gross income (worldwide) is over 250k.

However, be conservative on that. 

Lenders have been more conservative than when rates were lower but worth exploring for sure.