So you get a double benefit!  

Originally, I was thinking we'd buy a rental property to live in for the year (which would get us the owner-occupied benefits), then rent it out to long term renters and move back to our current house. 

Those gains are tax free as your primary.

I like the trust avenue for each property.Also, if i buy it outright, and sell it before a year, i pay short term capital gains on every payment received.

Jenny,Great question as there is indeed a lot of focus placed predominantly on cash flow that makes the returns associated with out of state appear to be the way to go.However, real estate returns are obtained from 4 areas: cash flow, appreciation, tax benefits & equity build up through amortization. 

I love the power of real estate and can't wait to gain more and more experience.Thanks again BP.  

My husband and I are looking at an investment property that comes with a tenant locked into a lease until March 2019. After crunching the number we would only cash flow $100/mo and has a poor cash on cash return but ...

So, gain allocated to personal portion will be shielded with sec 121  ( 250k -if single) and gain allocated to rental portion can be invested into other investment property with section 1031 like-kind exchange.  

For those of you who have rented condos what are the benefits and drawbacks of doing so? 

As a side benefit, this has helped me engage with people I might not ever have met except that we got involved and "put our money where our mouths are" when it comes to saying we want to help do some good for other people.It's one thing to say we wish to be generous and to help.