Its water proof and if a piece were to ever get damaged you can replace just that piece.

High spill and impact damage area.  

How much do you charge for damaged carpets, the living room is more than normal wear and tear, you can see a dark path where there was no furniture (even after shampooing).

You and your friend should dive into your states laws on security deposit, and the local laws where the rental(s) are located.Some local areas, LA for example requires the security deposit to be placed into an interest bearing account, and once they (the tenants) leave the property then the all that money is returned including the interest if there is no damage reported. 

Or do you put a general disclaimer on your listings (example: agreement to hold you harmless for any damages and injury as a result of renting your property).

(B) If the landlord makes an entry in violation of division (A)(8) of this section, makes a lawful entry in an unreasonable manner, or makes repeated demands for entry otherwise lawful that have the effect of harassing the tenant, the tenant may recover actual damages resulting from the entry or demands, obtain injunctive relief to prevent the recurrence of the conduct, and obtain a judgment for reasonable attorney's fees, or may terminate the rental agreement.

Possibly give them one month rent and if they move on time, without damages their deposit back in full. 

It lists the dog breed and weight then outlines their responsibilities - basically they are solely responsible for the dog, they have to pick up after the dog, the dog is not allowed to run free and they are responsible to any and all damage the dog causes.

Renting nice homes is so much better management-wise as well, in my experience (higher quality tenants, less turnover, less tenant damage or general issues, etc.)

Anytime they can't see what is behind the stucco or walls it opens youself to potentially more wood damage in what you can't see.