High rates should simply be priced into your deal analysis.

You are only required to have the property be your primary residence for 2 out of the last 5 years. 

For the tenants that will occupy the empty unit in the not too distant future I can make my own rental agreement, in particular, I plan to let them pay for the water as well, and I will set a reasonable security deposit.But for the tenants in the currently occupied unit:1) Would it be possible to write an addendum to the existing rental agreement to require the tenants to pay for their portion of the water bill?

And actually, there is no statutory requirement that you rent the property. 

Imagine a $2M loan not requiring a down payment.

1007 required?

Yes, interestingly in NJ the stove is required for a home (no other appliances are required). 

What documents do they require, what credit scores do they allow, how do they verify previous rental history, etc.?

However things change dramatically when buying an investment property, as down payment requirements do not go lower than 20%-25%.

@Ethan Swat have you done the math to calculate the increased booking volume or higher booking rate is required to break-even on the investment?