it is technically a real thing but very rare, and there is plenty of historical data out there that shows those who have less skin in the game are at a far greater risk of default by a factor of 5-7x.

What are some key factors to consider?

Will factor this in our decision making process.

If the rate is reasonable then it may make sense to try to save fast to get to the 3.5% down payment on a double or triple - househacking may allow you to increase your savings rate and pay down that loan even faster.As for estimating costs, closing in NY factor at least 1% of the mortgage amount for tax, plus $1500-2000 for lawyer, title and fees, then the amount required by the bank for escrow will depend on the actual property taxes and insurance.

Good location is a big factor.

Use the following as a "Factor" for discussion and not as exact. 

@Jay HinrichsAgreeMany use their primary residence appreciation as a factor which cannot be taken into consideration.

And don't forget to factor in design/furnishings into your budget keeping in mind your ideal guest avatar.    

and yes, of course your budget needs to be able to factor that in. 

We're contemplating allowing pets, as there will be no other roommates besides us and we don't have any allergies.Questions:- Considerations for Allowing Pets: What factors should I take into account when renting to tenants with pets?