I also don't feel the need to buy many doors or larger buildings; my personal goal is the most revenue, equity, principal with the least amount of tenants.

Quick numbers:Purchased at $237k, currently valued roughly at $266k, I have $144K left on the mortgage at 3.976% (principal payment is ~$350/month), current rent is $1800, net cash flow is $245/month.This is a townhouse that was built in 2012, and nothing of note has needed replacement.I'm confident that I could easily get a new tenant in for $1800-2000, but I believe that maintenance cycles will be coming due in the near future. 

Non-Payment of Principal or Interest.

I am not sure which documents are needed in order for her to only be taxed on the interest she receives and not the principal payback.

In the event of you wanting to sell your home, it is important to know what tax deductions will get you the most out of your sale.When selling your home, you can deduct:-Selling costs, as long as they are directly related to the sell of the home and it is a principal residence,-Home improvements and repairs within the last 90 days of closing, and-Property taxes up to $10,000

Also keep in mind that your E&O insurance will typically not cover you when you are a principal to the transaction.

@Joe Villeneuve I meant the normal principal paydown with the rent payments.

I bought a new house which we're going to use as a principal home and I am going to rent my current house.The house has a basement which I rented 3 times.

I already have two houses (principal home and investing home).

It takes a while to build equity through appreciation and principal pay-down.