The IRS operates on a doctrine of substance over form. Even though the form of the transaction is technically rent, which gives you deductible rental expenses and may be a deductible tax loss, combined with a personal gift, the substance of the transaction is that you are letting your family live in that condo for free, while taking an unallowable tax deduction for rental expenses.
I think it will not go well for you if you are audited.
It also might go poorly for your in-laws, if they were to use the "rent" they paid to qualify for a homestead credit, property tax credit, or other state tax benefits for renters.
