Reddit mentions of First-Time Landlord: Your Guide to Renting Out a Single-Family Home

Try thinking about it this way: If it had $80,000 in equity, you could sell it and split it, getting $40,000 each. If you wanted to stay in it, you'd have to pay her $40,000 to "buy out" her share.

Instead, you owe $80,000. If you wanted to sell it, you'd have to bring money to the closing to pay off the bank. You'd each have to pay $40,000. Instead of selling it, she is basically giving the $40,000 to you to "buy out" her share of the $80,000 debt.

Think about it this way: the other option is to negotiate that she continues to pay 1/2 of the mortgage until it is payed off, then you can sell the house and split the value. This is just having her pay the mortgage up-front.

Renting it out is a completely separate decision and should have nothing to do with how much she should pay you. Once she's no longer part of the loan, what you do with it (renting in it or living in it) is up to you.

If you do decide to rent it, try reading http://www.amazon.com/First-Time-Landlord-Guide-Renting-Single-Family/dp/1413316271 It helped me a lot when I rented out my condo. It isn't super deep, but it lets you know all the stuff to think about.