Do I have to claim the down payment as income since it was used to pay back a loan?

What’s the typical income in the area?

This can be appealing to investors seeking passive income without the responsibilities of active property management.2.

The other considerations noted by other posters are valid, but when you weigh them against the high risk of extended vacancy, ending at the beginning of winter is to be avoided at all costs.  2 months of added vacancy is a 16.6% loss to annual income. 

I assume its to make higher income ?   

Here are some things to consider when deciding whether to lower the rent: Evaluate Market Demand,Assess Feedback, Be Flexible, Remember, finding the right balance between maximizing rental income and minimizing vacancy is key to successful property management.

For the purposes of calculating the limited interest deduction, the total mortgage debt owed would include both the individual mortgage on Unit A and the owner's share of the underlying mortgage.So, the total mortgage debt owed would be $800,000 (individual mortgage) + $200,000 (owner's share of underlying mortgage) = $1,000,000.Therefore, the owner would be limited to deducting mortgage interest based on this total mortgage debt of $1,000,000, not just the individual mortgage.Thus, the deduction for mortgage interest would be calculated as:($750,000 / $1,000,000) * $40,000 = $30,000Therefore, in this scenario, the owner would be able to deduct $30,000 of mortgage interest for federal income tax purposes.

In 2023, I started a part-time remodeling service business to supplement the income in my consulting practice.

Evaluate your savings, income, and outgoings; moreover, educate yourself about mortgage alternatives and programs that help with a down payment.

If you're not careful, you can have your entire gain converted into non-exchangeable ordinary income.