It's on the outskirts of a nice neighborhood,  venturing into a not so nice neighborhood.

I'm still saying probably because there could be other complications we have not uncovered. 

. - flashing installed incorrectly around chimney resulting in water damage to roof- outlet burned out due to fire damage- dishwasher circuit wired to other outlets and light fixtures- rocks out in door jamb instead of insulation- carpets buried in backyard only uncovered when installing a shed- boiler worked once (ironically for home inspection) and had to replace hot water heaterThe list goes on.

My first plan was to fix it up and rent but with the market being so strong and this house being so nice I feel that selling makes more sense in this situation.

The best way to explaining this is for you to download an IRR calculator spreadsheet or build your own simple one and play around with one.For what its worth most deals I deem meeting minimal IRR standards is 13-15% but you have to dig a little deeper to uncover the real placements of cashflows and capitalization events... and then dig even deeper to verify the assumptions such as occupancy, rent increases per year, and what reversion cap rate was used.Again I don't look for IRR cause its manipulated a lot instead I look at total return on a 5 year basis.

The neighbor has called the police when my tenant has told her to leave her alone in a not so nice manner. 

Perhaps there's something a local expert would uncover. 

Yes, ultimately you have the discretion to cancel the contract based on anything uncovered in the inspection.  

The house is now fully renovated and listed for $630k, so nice ROI.

I included a mention that their new rent is the cheapest of all the similar properties in the area and the next closest cheaper renting property is in an area that is not nearly so nice.