Ex) $500 to get them out without damaging anything vs ~$1000-$2000 in legal & other fees. 

You do the most damage with the least exertion, beautiful, ....yeah Elevate owns some of the worst properties in the worst parts of town here in Houston.

Would diligently screening them limit the risks of tenants damaging the property?

Looking for people's advice on whether or not to pursue small claims court lawsuit for all my costs (rent, advertising, damages, legal minus deposits).

We did notice some water damage in the front of the house but was told the roof is in good condition.

If there is mold, it will usually be A) on the subfloor exterior, joists, and insulation in the crawlspace, or B) in any areas of water damage/water leaks inside the walls, behind tile in bathrooms, etc.

this newly identified risk mandates increased revenue (rent increases) to compensate for the increased risk of the government allowing tenant to not pay rent and damage unit with no legal means to get rid of the tenant.Just prior to the period in the article, CA passed statewide rent control on MF (starting at 2 unit) properties.  

I also let them know if there is any damage they will be charged for damages.  

If you get sued what is the likelihood they will win and what are the possible damages?

And third, you can make sure your lease's guest policy and non-smoking clauses are beefed up and made extremely clear to the tenants.Lastly, you probably inspected the property at least once or twice before closing, so you would have likely been able to determine if there was any significant smoke damage or cigarette smell inside.