The applicant chooses to pay for the service.

Also, I've been hearing a lot about "good debt" and mortgages and everything and I'm a bit afraid of any of that because I already have student loans to pay off...

They are willing to pay rent as well.

They pay Trash, water, sewer and the tenants pay electric and other needs (cable etc).

I'm trying to determine whether to pay cash for it, or borrow.

It won't take long to pay it off and then the money that was going to the mortgage will then go into the cash flow.

Electricity would be paid by the tenants, but since it's in Knoxville, doesn't that mean they'd pay the water or would I?

. - you could offer portion of the profits - i would note I think it is a bad idea and your better off getting hard $ and paying the contractor Family or friends and business do not mix well

Decide what you can pay based on the return you desire and start making offers.  

Today's buyers are MUCH more sophisticated and design-savvy than they were even a few short years ago, and WILL notice, appreciate, and even pay a bit more for that professional difference.