Duplex B in a B-grade neighborhood - I'm living in one side, renting the other, inherited some great tenants who pay a couple hundred a month below market value; purchased 6/2017 15% equity conventional loan; monthly I'm paying 45% of the mortgage, which includes $40 a month in PMI - roughly $13K would get me to 20% equity, and I gather I have to pay ~$600 for an appraisal to validate I've reached the 20% equity threshold once I'm there; tenants are paying 55% of mortgage, 10 months left on lease; I also need to reside here for 10 more months, but then I could move to a place with lower rent and then could rent my side for true market value.3.

In that ownership if one party dies then their legal heirs inherit the property not the other owner. 

The tenant I had was inherited from prior owner and prior owner had problems with this tenant as I am now finding out.

What else should I be concerned about with inheriting tenants?

On another note, during the application process during a refinance, I was asked whether or not I acquired the home through a divorce or inheritance...does anyone know why that would be relevant??

Yeah, you haven’t said what the problem is....I assume it has something with inheritance issues.

Read the landlord forums, A LOT of inherited tenants are trouble and headaches and not someone you would have picked if you had received the application.

I don't see anyway to mitigate or lessen this risk.  

, and I will be inheriting a tenant with the property.

The 5-year option lessens our need to budget for cap-ex and vacancy because we fix most all major things that we find before we put in an end buyer into one of our properties.