What would be some common pitfalls in either transaction? 

Due to foundation issues .

Which is very common to see from investors who do repair out of pocket.

If you owned it the whole time, the exclusion would accrue to you.Still, with these issues, I would have a professional tax accountant prepare  it.

This setup will allow them to determine their own usage, and we will pay the difference either monthly or annually.We use the warehouse only a few days a month, so our power consumption will be very minimal.If this makes sense, or if there could be any legal issues, please let me know.Thank you. 

Unless Uncle Sam has collected his and the income has been federally declared, it does not exist in the STR world which is why you are having an issue using it now.

Unfortunately, many landlords are hesitant to rent to these migrants due to their circumstances.Given our personal connection to this issue, my aunt and I believe we can make a positive impact by providing housing for these migrants.

If the fence was in good condition the dog would not be causing any issues.

We have some rental properties in Section 8 and its becoming very tedious to keep up with all the maintenance issues coming up on regular basis.

But you will need to help an investor get past the above issues to make headway.