What is preferable option - should I ask them to be the applicant or should their son be the applicant and parent be the cosigner?

There are several options to utilize the equity position.

How did you finance this deal?

How did you finance this deal?

Quote from @Jazzous Anderson: If you can afford it, separating the utilities and making tenants 100% responsible is the best option.

HI Yolanda,Happy to assist or guide any inquires in the financing side on your investment properties.

I was wondering if I should use my own money or maybe use the rental equity instead... or there's even a better option.

Based on the age of the surrounding facilities and lack of new, updated options, coupled with increased residential development projects in the area, my gut tells me it is a great location but don’t want to assume that if I really should be basing off of TOTAL nsrf being below or at 7. 

How did you finance this deal?

Since you'll be using a property management company, either way, buying the property base on profitability vs location might be the better option.