You can use acrylic, polyurethane, silicone sealants or hybirds. 

But like Insaid todays acrylic latex is sonewhat vapor permeable so should perform fine.  

An acrylic type tub and surround is about $500 in materials.

Paint, New Outlets, New Doors if damaged etc.Given this context, there are a couple of choices I'm facing:Choice 1: The Bathtub:Should I buy a more expensive Cast Iron Tub ($479) vs. a cheaper Acrylic tub ($385).

@Pat L.Pat, do you tend to replace with enamel-covered steel or with acrylic in rentals?

LOLSome info for you:  The regular dome types, are hard plastic or "acrylic." 

The acrylic liner over the cast iron tub will last longer than the steel--as soon as steel is chipped, it's downhill so incredibly fast.

how much should it cost to rip out a steel tub, plastic wall surround, and replace it with those plastic, 3/4 piece, acrylic tub and surround I see at Home Depot for about $300?

If you're not replacing it for insurance reasons, you could consider having it professionally coated with a hybrid system consisting of polyurethane-modified acrylic and reinforced with fabric.

Sell the property with inherited tenant to a bulldog who can deal with the tenant who is entitled to you treating them to a massage, craft beers, acrylic nails and hair to be done every week.