I have heard from people I know near the fires (including one who's house is the only one left on his block in the Palisades and one in a similar situation in Altadena) that smoke damage was not covered by their fire insurance..Hard to say what I'd do in your shoes since it sounds like it's more than a financial investment.

Houston in particular be vary wary of flood zones and any potential historical water damage from the frequent flooding / hurricanes of just a few years ago. 

I have had to use the RA 3 times in 3 years and every time it has help up to scrutiny and has allowed us to collect for damages, remove people breaking rules, etc.

I feel lucky it was not in the path of Helene and the construction was not damaged!

You are also very susceptible to damage during storms.

If you want to minimize the relationship damage, you can perhaps sell.

I'm personally always worried about tenants trying to damage the property out of spite so hoping everything went smooth on that end.

The security deposit must be kept in escrow, but it belongs to the tenant until the PM have documentation allowing them to contractually use those funds for damages. 

The Tenant Class greatly impacts rental income stability and property maintenance/damage by tenants.Both Property Classand Tenant Class affect what type of contractors, handymen and property management companies will work on a property.If you buy & renovate a property in Class D area to Class A standards, what Tenant Class will rent it?

Some sales contract's don't limit the seller to retaining the $5k EMD, they can also seek liquidated damages in addition.