In this case S8 is probably not a good option.If you are convinced you can find a great family that will take care of your property, then either option is fine for you. 

I turned to the Diontalk Binder strategy which educates the tenants on the current price of market rents, section 8, etc, and what I could potentially earn if they were to move out ( In this case being 1500 for a 3b 1ba). they then realize this and know paying a $400 increase (36.6% Increase) would be the best option vs moving out, living in cheaper housing, or going to market rent in the area.

Then, if you are not satisfied with what you find, you can explore other options, but for now, I would find out what is happening on the ground face to face.Best of luck - Chris

In addition to what was said above, for the software that has a free trial option, sign up for it and use the software for a day (or at least a few hours) as if you are using it for real, then call their customer support too and get a feel for that. 

The sales comparison approach is typically done for residential real estate and will be less appropriate and come in under value because there are no good comps, and even an appraisal using the income approach (unless the appraiser is trained to do more complex commercial appraisals) is probably not going to be the most accurate either because they typically use market cap rates and in this case you don’t have good comparable income properties to find the market cap for the analysis.  

Best to talk to her and understand your options.

We also had the option of another type of policy that was even less expensive that would have required us to spend at least 1 night in the house and rent it at least 30 nights each year.

Typically you aren't buying a fixer upper with a conventional loan.

You can find cheaper options on some other stuff, but I hope this gives you some Insite as to what money can buy these days. 

Lol Have you done many lease options as a buyer over many year term?