As this is my first time going through something like this, I'm not totally sure what my rights are and what would be a reasonable amount to ask for.Some additional background:I live in Chicago in an owner occupied 3-flat, and the tenants live in one of the bottom units. 

Another common scenario is an owner may offer a discounted rate to get someone to bite on rented the whole unit.Up until 18 to 24 months ago, I flat out think Gainesville was significantly undervalued.

I'd much prefer a flat seasonal fee over per visit billing to make the expenses more predictable.You bring up a good point about not having the vendor come out if it is under a certain amount. 

If I were in your shoes, I'd look to first buy a 2/3/or 4 flat since they are usually more expensive and take advantage of getting a conventional 5% down loan.  

You could charge each tenant a flat rate each month to at least recoup some of the costs, or you could safely assume that it will be between 100-200 each month for water/sewage.

For the least headache, take the yearly average and charge a flat monthly rate that is specified in the lease agreement.

They may have also bought on a sweet deal and are just letting it bake until they feel like renovating.

You said you were going to live in it (that's how I interpret "out first home"), so why not buy a two flat, fix it while living in it (with a reasonable mortgage and use your $500k for down payment and renovation), and THEN sell and buy another that you can THEN present to the bank as a fix and flip, showing that you have some experience under your belt?

For instance my wife here IN Oregon is with a company that has over 500 agents and she has a flat fee of 135.oo a month which includes E and O and broker support..

When my tenants ask if I am willing to sell they get a flat 'no'.