Johnstown, eh? I'll be in nearby Somerset, PA in a few days. How about that? :-)
I am doing what you are thinking about. I hadn't "planned on it". I had been looking for a single family and found my multi-family by accident. I worked up the #s with my realtor (who's got a background in finance) and ... wow! I just HAD to buy that house.
You have gotten other pieces of very good advice.here. YES there ARE tax considerations. Yes, you should talk with an accountant to understand them fully. But they are fantastic from my view.
Yes, it IS possible that your tenants can pay your mortgage (not necessarily including your taxes by the way).
Please be aware that there are very specific state and federal laws that cover certain areas of landlord tenant agreements, etc. Please see the links below.
Here are some tidbits that may be of interest to you. Caveat: no I'm not a lawyer but I am a landlord and went into this eyes wide open and did my due diligence. I'm just saying that do NOT jump into this lightly. You need to know what you are getting into.
When you work up your #s, be conservative. Assume that you will only get X rent instead of what you HOPE to get. I worked up my #s based on a very conservative model, along with 1 month vacant per year per unit. And the #s STILL worked for me. So I "had to buy that house". But that's me and I'm ok with that. You know better than anyone what is suitable for you.
Things happen. You'll need to have several thousand dollars in a checking/savings account that you can use for emergency fixes. I keep $5000 as a "just in case" fund - and that's AFTER I have a full house full of paying tenants. Some might consider that overboard. I like having the peace of mind. This fund is only "just in case for the house" - I have other money that is "just in case" for other things like loss of job, etc.
You need to figure that it will take MONTHS to get "the right tenants". You'll need money to bridge that gap.
I found that Craigslist was the BEST way for me to get qualified tenants, without question. The sign out front got me LOTS of calls. LOADS of them - and 90% from people that I would not want under my roof, regardless of whether they could actually prove their financial situation. I will never post a sign up again. If you build a really nice ad on Craigslist, with lots of great photos, and keep reposting it every 3 days, you will get a nice pool of people - most of whom are reasonably "pre-qualified". That's been my experience anyway.
You will need to be able to run credit checks. There are MANY services that can help. The one that I liked is http://www.clearscreening.com.
Please note that you MUST by law handle certain things in the SAME way for everyone. More specifically, you can't run "only a credit check" on person A and then run "a credit check and background check" on person B. That is illegal. I'm not a lawyer but this is my understanding and I read a LOT to cover my butt.
Note: there are specific laws in PA as to exactly how you MUST handle security deposits (escrow, etc).
Your advertising must not violate any discrimination laws. This may seem obvious or where common sense would apply. But it is actually very easy to break these laws and you do not want to do that. For instance, you can not advertise for an apt with phrases like "perfect for working singles" or "great for families'. Learn the laws - they are well-written and I found them easy enough to just read and understand.
BUT ... if you live on the property and it is 4 units or less, then in PA you get to decide WHO you will rent to! That's right - if you LIVE there then you can decide that you don't like people for any reason and not rent to them.
Here are some resources:
By the way, I LOVE my tenants. They are GREAT people, and we get together socially all the time. I spent a lot of time waiting for the right one's to come along (and did a lot of advertising - but Craigslist was the way to go for me). Please make sure that you won't have to rush and pick people too quickly. That's a risky road.
Please bear in mind that most people are not looking to move in the winter. So, plan accordingly for anticipated move-in dates and enough money to float the difference ...