Capital Gains – Depends on your tax situation 6.

I'll look into that first.Just curious...why fuss (in this situation) with trying to change zoning on the property or deal with city permitting?

For this situation, you probably want a gate latch which is a regular style handle that locks automatically when pulled shut (i.e. it cannot be left unlocked by accident). 

I have a feeling that if you use it as a rental, your emotional attachment to it will lead to you over-maintaining it, ultimately creative a negative cash flow situation. 

It’s a buy and hold situation so I agree, that does change the situation somewhat.

However, I’ve moved into a situation where I no longer have the time to do the work myself, but still love the process.

What wasn't mentioned is there are several cities in the state like San Marcos which requires a general contractor to pass the national ICC's contractor exam which can be taken at numerous testing facilities and is similar to the licensing requirement in a lot of other states.

You could also put the property into an LLC as opposed to putting his name on it as well, but you would just be back into the situation your currently in, with lesser terms when you go to refi (due to LLC).

At that point I can evaluate market conditions, time of year, situation at hand, etc and provide a reasoned lease cancellation quote for the tenant to consider.

Hurting your financial situation to help them out has its limits.