I'm thinking of buying a duplex, living on one side, and renting the other side to a close friend. Is this going to make the mortgage more complicated? Also, what if I wanted to set up some sort of "rent to own" situation where a portion of the rent could be counted as equity at some specified future point if the renter decided to purchase his half? (I realize it would mean we'd have to condo-ize and then each purchase our own half.)

1. It may change interest rates you can get with it being a duplex, but if you have excellent credit, there should be no issue.

You can't divide it until the new mortgage is paid in full, so any rent to own, or contract for deed may be to soon to do, Also you would have to get the property zoned for that before you could even offer it.

Next the last perosn you normally want to rent to is a close friend, honestly read this site for a few hours and find out how many evictions, how many law suits are because of my best friend, my friend, and my other friend.

Rent to someone you can evict without any personal feelings.

On a side don't rent to a friend unless you can afford not to get the rent or don't mind lossing them as a friend.

And even worst than a friend is a relitive. I have often had to "eat" months and months of rents because of frineds or family members..