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[spooky3]

25. Then the taxes on the net rental income

Would be pretty low in your marginal bracket.

Let’s say you take in $500 per month in gross rental income. The allowable expenses against it might be $400–maybe even more, with depreciation. You would pay income tax on only $1200 per year over the income you already pay tax on. If your marginal rate is 20%, you would owe only $240 more in tax on $6000 of gross income. Your expenses would go up a bit but depreciation doesn't cost you, and insurance and most other expenses you would have anyway. If you rent it you would have a lease that would potentially give you more protection than if you had a roommate.

But there are risks either way, with a jerk for a roommate or tenant, as you’ve said. Would it make sense to consider selling and downsizing?