In addition, she starts to speak to me about the ac needed to be fixed.

I am hoping minimal income effect but understand having off street parking may justify slightly higher rent.

The property itself cost roughly $100,000 and I will need to get an additional $80,000 for rehab.

@Don IrelandOwning a duplex that you plan to househack is likely up there in complexity when discussing tax returns.When you acquire the property - you will have acquired an investment property in addition to a personal residence.As such - direct expenses related to the investment property and indirect expenses related to the investment property will be deductible when calculating rental income.I agree with Ashish - that you should open up a separate account that relates to expenses paid for the duplex.

They were not open to learning anything about the situation, and said so, but did they make any additional comment or engage in any discussion about the problem or the solution.

. $60/per month for Tenant B.Tenant B agreed verbally on this, but ever since that agreement he still neglected to include the $60 as an estimate for utilities in addition to his rent.I can’t make him pay it, since I do not have the actual utility bills.

My additional concern is that if I long term a tenant in the top, would the noise of a family scare off my Airbnb tenants below? 

Additionally, and perhaps and even bigger factor, is that all QOZ real estate investments will involve either ground-up development or "substantial improvement". 

Not really your target respondent (not in major resort area), but I don't find it much additional work to list on ABB, along with VRBO/HA.

Additionally, finding the right investor focused RE agent will help you to analyze deals, keep you apprised of off market deals, and allows you to keep a pulse of the market conditions.