I've been thinking about doing something similar with/for my daughter. She wants to move out of home and I will need somewhere to downsize to when I retire so was thinking of buying a 1br place for her to live in and pay a nominal amount of rent (she's not working full time) while I cover the rest of the mortgage repayment, plus rent on our 3br family home.

Financially it's do-able and intellectually it makes more sense than me buying somewhere and renting out to a stranger, while lives somewhere else and pays rent to another stranger, but I think she'd see it the same as above - that I was using HER money to buy MYSELF a unit (even though she'd be getting bargain rent and she'd get it back as inheritance...)