Which of the following rental situations involves using a property that was previously the owner's residence?

The situation that involves using a property that was previously the owner's residence is characterized by an inherited property. When a property is inherited, it often has a personal connection to the deceased owner, typically as it was their primary home. The inheritor may decide to keep this property and either live in it or rent it out, preserving the familial ties to the residence.

In contrast, a revenue-producing investment refers to properties purchased primarily for the purpose of generating income, such as rental properties that may never have been lived in by the current owner. A future retirement home denotes a property that may be intended for future use, but it does not imply that it was the owner’s previous residence. Lastly, a transfer to another city is related to a job relocation, which may not involve any connection to a residential property in the context of previous ownership. Therefore, the correct choice directly reflects the context of using a prior home as the inherited property.