It is a waste of my time, not to mention dangerous.  

Don't use anything sharp, illegal, or dangerous either. 

I think the rent refund is a dangerous precedent, and as described, likely the beginning of the end.

So off the bat... this is a dangerous deal.

Agreed, I don't see an accounting issue.But if your employee loses his job, will it be clear that the tenant relationship is distinct and separate.

Might be dangerous to pitch to tenants but not a bad tool for my roommate to pay me monthly:)

Dangerous, IMHO.

I was making the distinction between "single family residence" (SFR), the definition of which is 1-4 units, and "commercial" which is 5+ units (in a single building), not the purpose for which the buildings are used (commercial, as in rentals).

Using a number like $20,000 is dangerous.

There is definitely a distinction between the two, as @Michael Biggs and @Jacob Sampson pointed out.