Leasing at $3k/month covers your current mortgage comfortably, so refinancing could relieve the pressure of the balloon payment.

Keeping this as a rental would not cover the mortgage (we'd have to pay ~1500 a month including utilities) and we can afford the extra payment, but is it worth it when looking at appreciation?

So make sure you can cover both loans for awhile. 

One note is that if the property was helping cover my costs of living while I house hacked it I wouldn’t worry about negative cash flow while I resided there.

One was making an extra $600/month while covering all of his household expenses with just 3 PadMates. 

Future AppreciationLynchburg’s market has seen about 5% appreciation recently (4.3% Sep 2024), meaning your property could gain around $110K in value over 5 years, helping to cover renovation costs.

That is where the letter of the law stands and to have you covered..

Offering $450K would leave room to cover the $50K in repairs, and since market rents support a solid increase after updates, this could boost your long-term cash flow significantly.

This was so important to our business that we covered the cost of these consumable kitchen supplies for all our owners.

Second, I have experience with hundreds of pet owners and it is very rare (in my market) for pets to cause more damage than the deposit will cover.