The first applicant was a cute couple, but failed the test.

The house next door to me just went on the market for310k and it is just a cute little cape built in 53. 

Most of your subprime mortgage mess has cycled through.. and as stated burntout landlord syndrome is not as acute as its been in the past. 

City Tax assessors have a cut off date and they can do very little to change that.

They are there to answer any questions and walk you through the process and in return they get a cut of the deal (anywhere from 20% to 50%).

Someone who has been around through the down turn can help you do this, or there are short sale negotiators that can get the approvals for you. they will take a cut of your commission. 

One thought i had was to lease it to a property manager and have them airbnb it and give me a cut. but it all seems too complicated.

I was a cute little 2 bed 1 bath with a massive 3 car garage and 115' of prime lake frontage.

by the way you worded it, it SOUNDS like they are bad at managing this portfolio and know you can do better, but they still want a cut for doing absolutely nothing simply because they are salty about their own ineptitude. if that's the case, I would tell them to pound sand, otherwise the transaction should warrant market rate costs

Think about it this way: did the negligence of the PM "cause" 5 months of rent, unpaid utility bills, a cut down tree and $10,000 in damage to the property?