So I have kept renting it out since then, taking a loss every year (rent did not cover expenses of taxes, insurance, maintenance, mortgage payments) so never any cash flow from it.

I'm guessing appreciation and mortgage paydown combine to give you greater wealth building than this $7200/year loss. 

Should only be a few hundred dollars and worth every penny IMO.My last lease, which I thought was pretty up to date, didn't' allow me to recover attorney fees for an eviction, only the past due rent. 

Stay hopeful, learn from both wins and losses, and get help from experts in law and money to move through the tricky parts of investing in property.

Can anyone explain the process of recovering the damages?

First, you don’t need REPS status for the STR loss benefits.Second, REPS is a double edged sword.

I have zero empathy for you and if it was my property might sue you for the loss of the tree, and in any case I would evict you for your actions.  

We will be moving cross country and not involved in the management much so I don't think we can claim those losses. 

Usually insurance companies only cover loss if the property is uninhabitable.

The bank from my understanding will be writing off a loss on this loan as there is not enough money to go around.Here is where it gets interesting, there is a second lien on the properties from a seller of a hotel that the current owner of the 21 unit bought seller finance. obviously there is not enough money to get this guy paid off as the bank is already taking a loss.