although sub prime was very predatory so those folks have a beef to a certain extent but then again many who fell for sub prime needed better primary education at the end of the day so they could protect themselves..

What terms and conditions should I add to our contact to protect the interest of both parties?

It should not make a difference for taxes, although I am not an accountant, so I can't say for sure.I'm also not a lawyer, but the LLC would be to protect you from liability claims.  

There are too many factors to consider.If you're simply looking for legal protection, a much simpler option is to purchase umbrella insurance of $1 - $2 million. 

For that reason, I would recommend requiring a two-month deposit or first/last/deposit as additional protection against them skipping town without paying their last month of rent.

Each state has different laws protecting the rights of tenants and the last thing you want is the wrong advice.

1. cashiers check money order or zelle(once a zelle is sent it can not be cancelled), avoid credit cards because they different laws regarding consumer protection that allow for chargebacks....avoid cash, you don't want to be known for having thousands of dollars on you2.

I think we just want to protect ourselves and our assets as much as possible.

Anyway, due diligence is a checklist process...and the first 3-days in contract are fast paced to keep you protected....the initial goal is to preserve your capital...that means a contract clause requesting an agent walk through with copies of all leases, rent roll, and income and expense reports within 48-hours is standard.

You might also want to talk to a lawyer, to make sure you're protecting yourself from the various tricks bad tenants can pull there (especially if you're relatively new at this).