Generally tax status is established by filing an 8832 or 2553 if electing corporate tax treatment, or by filing an initial return if electing default status.You'll want to run everything by your attorney and CPA as it seems you're going with a semi-complex structure.

Then I get to wait for someone to accuse of me of disparate treatment of a protected class or, preferential treatment to another class.

My understanding is that the tax treatment is the same as if I were using that amount to buy a separate rental property.

you don't want to turn your primary and its take free equity into a rental .. the tax free sale of a primary is the number one best tax treatment in my mind.. if you want to move on sell it take your money tax free then go shopping for rentals or house hack or whatever.now if there has been no run up in value that creates a tax free situation vis a vi equity.. then probably does not matter

Is there any way to switch from treatment plans to public utilities?

Yes, @Bob Langworthy I did a lot more research & found that the property is sorely overpriced.

@Jenae Young- I was a GC for 22yrs, Andrew had the perfect response so re-read his post.

But then again if there is a big tree leaning over that brand new roof, or if you often get significant hailstorms and the like then the equation may change and you would want to be setting aside more for expectable damages/treatments. 

NFL home-game weekends would be nice also.And the other end of the fun-misery spectrum, you have some of the world's leading cancer treatment centers just down the street, and so there are always people coming in from out of town for long periods of time for treatment. 

Could you shed a bit more light on the tax treatment of Schedule C vs E in this type of scenario?