I am concerned about this because I know people can be careless with their water consumption and don't like the idea of having to pay for a tenants negligence.

Regardless, use this as a learning opportunity for the tenant and remind them they may be responsible if a problem is caused by their negligence or abuse.

Between the rent and equity you gain just from time the extra interest you pay is negligible.

@Theresa Harris Unfortunately, his CA home is going to net him a negligible sum compared to the property he's purchasing :( 

In the case of negligence, where your rental insurance or umbrella policy do not cover you either to the full amount or because of some clause or term which inhibits coverage, you're exposure is limited to solely that property.

Doesn't matter if you have 1 or 100 credit pulls, it all counts as 1 inquiry against your score and is negligible. 

The owner below may have sole responsibility for the repairs (so long as you weren’t negligent) even if the alleged damages originated from your unit.

They have to provide updates to CFPB (sorry will not cut it) and if CFPB finds negligence, then might start an investigation and possibly fine them.Hope this helps.

In addition, buried in that fine print you will likely see that even if, in the unlikely event, you are able to prove some very high level of negligence on behalf of the inspector your claim for damages is limited, at the very most, to the amount of money you paid them to conduct the inspection.Trying to get to any point in proving their negligence will exceed the cost of the inspection after your first call with your attorney 

So many upgrades have no/negligible increases in the valuation of the home.