The property has been in excellent condition since it was built two years ago, and I’ve lived there myself without experiencing any similar issues.The lease is a standard Texas lease, and I’m seeking advice on how to approach this situation fairly.

That approach will take you forever.

Approaching it like that would also automatically set an expectation for the owner to pay maintenance expenses. 

Without a permit, the rental income might not need to be reported, but this approach risks legal issues, loss of tax benefits, and complications during audits or resale.

@Maxnbee Nyabende - So great to hear your approach of prioritizing vertically integrated companies when thinking of where to build your rental property portfolio. 

Admittedly, my approach to these questions was more along the lines of a conversation I would have with a lawyer representing the party on the other side of the deal but much to Clayton's credit, the seeming complexity of it didn't get in the way of what was his genuine desire to make a deal that would be fair to -- and on terms that would be agreeable to -- both of us.

This approach saves you time and effort while keeping you in compliance.

I had a few properties when a lady that owned a cleaning company I had contracted with previously approached me about combining forces on a property management company.

There are so many ways to approach this model, from buying existing, to retrofitting homes, to building new.

I've been watching Chad Carson's videos and his approach of accumulating more properties than you need, then start using that income to pay off mortgages and cull the lower performing properties makes sense to me.