Since the original lease already includes a provision allowing for a month-to-month extension, and both parties have been operating under this arrangement for the past 2 years, it makes sense to just add the terms of the long-term extension to the existing agreement.

Depending on the experience we may opt not to go the LLC route and try to establish other strategies for asset protection that is consistent with management and cost minimization.Would appreciate hearing about the experiences of other real estate investors, including about the pitfalls to avoid with this kind of structure? 

Examples include:- CAP's or limits on the number of vacation rental permits allowed.

(price includes home and any renovations completed).  

Ours has a 5 foot deck with roof built into the plan so that is easy peasy from your perspective and the presentation of the home lends to appraisal.

Do a 1 year lease and let them know you are willing to keep them long term if things continue as they have been.I did a 2 year lease with one set of tenants and it includes annual rent increases.

Not sure of any residential lenders that can value the property off the income approach if that's what you're looking for, but you can still get appraisals that include it.

You can only get that rent if you include all utilities, which you would never ever want to do. 

This allows DSCR loans to be more adaptable to the market as real estate investing strategies change, including the BRRRR method.

In 100% of the cases I have experienced (including one we are working on as we speak) the roomates leave their crap behind and leave the house in a total mess.