Maybe its just a blip, but I'm hopeful that we'll see population increase in the city limits sometime in the next few years.https://www.cleveland.com/news/2024/05/clevelands-population...  

We are not large scale but we do own properties in multiple states and are aware of the limitation of a subjective line like "should have rented in a hot market".

With the limited info, I would say #1 is your smartest option but there are a lot of variables missing.

We have offered to allow her to pay a reduced rent for the first few months as well but I am worried that may create some sort of limit on how much we can raise the rent on her in the future.

This allows us to participate in both pushing rents while also limiting vacancy exposure.

My options are very limitted and the situation is very draining even I follow the bigger pocket advises and I unvested a lot of time in learning and also have years of experience with tenant.

Large gifts, including real estate, may benefit from structuring around this limitation.

You've listed the "big three", and those are all that are needed for most MTRs, especially if you have a limited number of doors in an area.

Credit is a factor as bad credit may limit options, or may have the lender require you to put 10 or 20 years of taxes and insurance into escrow. 

We bought a home built in 1900, insurance water damage coverage is 10% of the dwelling limit.