I finally received a demand letter from a "nonprofit attorney" representing the tenant, claiming that the tenant was living in uninhabitable conditions—typical for a non-paying tenant, I guess—and now she wants to "renegotiate" the rent and keep living in the same space.She has been filing complaints with various government departments, but all the cases were minor and have been closed.

I live in a state where this is easy and inexpensive to do.

Personally, I wouldn't live somewhere where I have people living above me as I am sensitive to noise. 

I doubt one of those posters has apologized to the lifelong damage they did to the financial lives of anyone that followed their advice.

If you're living there and you plan on living there for a little bit but I don't see what the harm is in it especially if you want it. 

The plan would be to live in that property for 3-5 yrs, pay down the mortgage, then turn it into a rental.

The worst thing an Owner can do is to live in the same place as the Tenants. 

The upside of that is when they move out (because you won't be renewing their lease), if there are ANY stains; you can bill them 100% of the cost for that carpet because it was brand new when they lived there (okay maybe not 100% as it will be a few months old when they move out, but 95%). 

Now, I think each person has to evaluate their level of risk comfort because being highly leveraged can also create problems if there are significant market shifts.

We put a mini split per bedroom as well as a larger mini split in the living room area.