I am a block away from a university.Here is the dilema.

Milwaukee is block by block and most OOS investors (and relocation clients) are surprised by the range of choices.

As soon as you see that two-day block, then you'd go into the calendar, click on "Availability Settings" then "Add another requirement" and change your minimum-stay requirement to only 2 days for those floaters.Be nice!

You are terminating their lease, which is done without court involvement.I recommend you present the tenants with an introduction letter as soon as you close on the property.

Is there a legal letter I should send?

Block the garage as well.

You could respond in  a letter with those points and their options. 

I'd consider starting with letters then perhaps following up with a few rounds of postcards.

I finally received a demand letter from a "nonprofit attorney" representing the tenant, claiming that the tenant was living in uninhabitable conditions—typical for a non-paying tenant, I guess—and now she wants to "renegotiate" the rent and keep living in the same space.She has been filing complaints with various government departments, but all the cases were minor and have been closed.

If you intend to hook it up it would be smart to make sure it is not blocked either by tree roots or crushed at some point underneath the lawn or someone poured cement down it or something like that.