This allows you to report the rental income and expenses directly on Schedule E of your joint tax return, simplifying your tax filing process.

Ask yourself, why would the federal government pay MORE than market rent and waste our tax dollars?

Agreed - plus two additional thoughts:1) I always recommend having your CPA also review the drafted operating agreement for the tax issues. 

Is your DSCR ratio greater than 1-meaning are you cash flowing (according to the lender's criteria of mortgage, property taxes and insurance (and HOA) if applicable).

Unless there is a reason to submit your tax returns, you could go w2-only. 

If you buy a duplex that rents for $3K a side and take 6 months to do a remodel, you will lose $3K plus the interest you are paying, taxes, insurance, and utilities if we estimate $1500/mo for that stuff. 

That includes property taxes, insurance, the cost of maintenance and labor etc.

Their taxes and insurance may have doubled and they can't afford the house any more.I think geographic is tough because there just isn't typically the turnover any more in most areas. 

@James Thompson Transferring property from your in-laws to you can be done through a gift, sale, or trust transfer, each with different tax implications.

Advisory services (tax, law, brokerage) are also avenues.