In return for this convenience and my extra work in collections I raised the rent slightly.Example: Current rent then was 1400/month.We agreed to $370/per week.

How much are you still collecting from the tenant?

So Costco has a new blanket/comforter in stock. https://www.costco.com/seasons-collection-down-alternative-b...Seasons Collection Down Alternative blanket.

You aren't going to take someone to small claims court for damaged paint or anything, and if a major loss occurs the tenants are almost never collectable anyways. 

It's just a way for the city to collect more money, total scam.

(Most likely considering adding a 7 year ballon.)Do you suggest letting a loan servicing company handle payment collection/escrow/insurance or are you all handling those pieces?

First is experience handling property management, are they themselves investors, processes for handling maintenance, evictions, collects, and then maybe the fees and pricing (commission, lease fee, release fee, inspection fees, and all of the other garbage fees most PM's make up).

I know I probably wont have any luck but is it worth it to turn it over to collection agency if they can collect anything?

I even do my Lease Options through escrow to make sure the mortgages are paid and seller's don't walk with the cash leaving me a foreclosed property and no way to collect.

They also have a "reserve" fee in which they collect 10% of every credit card transaction and hold it for 90 days before releasing it back.