So, in addition to having asset protection, it's just as important to be smart and ethical in everything you do.

It makes great business and ethical sense imo.

Your mentor will not only appreciate that but also see your work ethic.

It is my belief  You should try to make every Reasonable effort to confirm the person is legal atleast from an ethical patriotic standpoint as an American. 

I did an employment verification, and the income was a bit more than 5 times the rent - so that to me showed more than adequate ability to pay the rent - but keep in mind that there is no such thing as guaranteed employment; their work ethic is something you will have to check by gut feeling or instinct.Now, your applicants say that they have companies in Europe, so I presume that means they are owners of these companies.  

I trust his opinion and business ethics and would continue to do so until he gives me reason to think otherwise.

But from an ethical standpoint, I can't help but feel this is a not a good and honest business relationship between me and the insurer.  

If you do out of state like I do, you need them to be ethical and efficient.

Also, the tax treatment for owner occupied units is favorable and at least here the capital gains after a certain period get favorable tax treatment.

Is this ethical?