Apply the deposit and refund the remainder or charge them for any uncovered expenses.

@Michael SheaDepending on how close you are to the ocean, you can probably get away with those whole house fans where it sucks fresh air from open windows.

But back to original comment, if things are moving forward, I would lay out that you would love to stay involved in the deal with an ownership stake for uncovering the deal, and then let the conversation take it from there.

Is a fresh, nice, house treated better by tenants *generally* than one that's just left in dated/worn condition? 

Empty the property, clean it up, start fresh with a competent property manager that handles these issues so you don't have to.Remember: cheaper doesn't mean you'll make more money.You can start by going to www.narpm.org to search their directory of managers.

Also the good thing is that your tenants are month to month and if it don’t work out you can tell them that you will not renew there leases and you can start fresh with your new lease agreements with new tenants.

Get it in writing while it's still fresh in your mind. 

The people who are born and raised in Denver continue to opine about the affordability, but those who are moving into the city with fresh eyes will gladly take their profit from the coasts and pay all cash, over ask in order to live in (again, my opinion) the best city in the country - diverse economy, great work/life balance, friendly people, city without most of the big city problems, 300 days of sunshine....

It seems like it might be best to find that middle 'sweet spot' and go with the median level of finish then in your case (sounds like not wanting to invest a lot to update, and want to keep cash flow at max.)If I were to run comps and see on the high end of area rentals it meant all new countertops, appliances (high end), hard wood/laminate, kitchen cabinets etc and on the low end it meant more of an 'apartment level' finish - I personally would go for the middle road to this and maybe choose to refinish countertops, refinish kitchen cabinets and go strictly mid-range on appliances (I would pick up the extend warranties personally).In hitting the kitchen and baths, getting some fresh paint up and addressing flooring- I would know the heavy 'where the eyes are drawn to' items were checked off my list, take it all for expenses come tax time and be pretty happy to know I was right in the middle zone for the area- I wouldn't have the lowest quality of renter pool in the area, or be worried about overpricing myself out of the competition on the high end in my mind. 

Complete interior/exterior paint, Flooring, pressure washed/freshly stained deck, Upgraded the bathrooms and laundry to "farmhouse style."