I'm not sure if this is a good or bad idea, or if I should just stick with a regular tenant for my first rental, as I've got 3 other decent applicants. 

I am W-2 and I pay full mortgage for my regular live in house.

This is much less costly than an Attorney to settle the issue once you are clear on what the rules state.Your HOA PM should be enforcing the current rules regularly and equally for all.

At the same time, 2 minutes' research shows that the regular cost is above $500, and that's the ballpark I heard from several attorneys I contacted. 

I've seen this many times, last month we had someone from fort still in OK to the JBLM Lewis Mcchord and that resulted in a higher BAH (more expensive market) but also because of promotion in Rank from lieutenant to captain.Just make sure you figure out the approximate increase in pay and if it will be non taxable because you can also gross up your non taxable portions of your pay 125% or 1.25X as well (usually its just the BAS/BAH but not your base pay).This will allow you to figure out your borrowing power ahead of time. 

@Jeannette Tang A great way to house hack these days is to rent a 2-5 bedroom unit and Airbnb the rest of the rooms to other guests, the cash flow will be very high compared to a regular rental property, but it will not be comfortable doing it with a spouse because there is not a lot of privacy.

You may find they are behind on rent regularly or that they have unauthorized pets or people living with them.

Any good investor friendly agent is looking for more of a partnership than just a regular client relationship.

They often get less in rent increases than anyone who we were doing regular fixed leases for, because we have the flexibility to raise rents more or less any time if the situation arises, whereas with a fixed lease we're going to include an automatic rise because we have no way of knowing what the next 12 months will bring. 

I'll try to break it down as clearly as possible while also trying to avoid running afoul of the BP self promotion rules.Everything that I can do for you as your agent can be ordered on a menu like at a restaurant.