If they're paying and are not wrecking the place, keep em and bump the rent to market level as soon as you can. 

@Jonathan Greene, my last house that I bought as a primary residence was a wreck.

I wouldn't want to wreck my reputation over $11K.I'd probably pay the $131, but if you want to use that as leverage, say you'll resign at $130K. 

My sister thought she hired a licensed plumber on this too and it's been a train wreck but she also is too lazy to get 2-3 quotes so now I'm doing the finish job.

I inherited her from the previous landlord, who did not collect a pet deposit or ask any pet fees for her dog or two cats.Well, the dog has absolutely wrecked the hell out of a large set of blinds by chewing on them.  

The  traditional forward 1031 path of "sell your house and buy another in 180 days" just would not be anything less than completely nerve wrecking. 

I don't think I could rent the place out, as the mortgage payments are quite high so rent might be out of someone's budget, plus I would then responsible for any issues that come up and if they wreck the place, even worse.

Don't cheap out on property coverage as that is what makes you whole in case of the property getting wrecked and don't cheap out on liability coverage as that is what is going to cover you in case you get sued by a tenant or guest in the case of a vacation rental. 

They stop paying, they under insure or drop insurance,  they don't keep maintenance up and the place gets run down (you may get back a wreck) to name a few.Selling on terms can be an additional source of interest income. 

This is absolutely nerve wrecking but we are committed!