I just had tenants move out of my investment property (duplex) without paying for the last month's rent, and the damage they inflicted onto the property exceeds their security deposit amount.

I try to be in the luxury market and also try to steer away from young kids (my only real damage has ever occurred from them, or should I say parents that don't watch their kids, and they drive the people crazy in my community pool, again, because people don't seem to care to ensure their kids don't disrupt others).  

Nice try, but this time does not count.In order to meet 750 hours, your wife will need one of the below:- do something else real estate related, like wholesaling or realtor- actively work on expanding your rental portfolio - have an extensive DIY rehab, like a month-long full-time rehab (and then she might need another kind of rehab)- a calamity such as multiple properties damaged in a storm where she will have to deal with insurers and contractors- something else out of the ordinaryAgain - if all you have is 9 single-family properties with stable tenants and typical occasional maintenance - you don't have enough work to collect 750 hours.

Save yourself the brain damage, clear it out, convert it back, discover a whole new class of tenant you can now get and enjoy the ride of eliminating 70% of the hassles this property delivers. 

-----------------------------------------------------------------------------------------------------------Recommend you first figure out the property Class you want to invest in, THEN figure out the corresponding location to invest in.Property Class will typically dictate the Class of tenant you get, which greatly IMPACTS rental income stability and property maintenance/damage by tenants.If you apply Class A assumptions to a Class B or C purchase, your expectations won’t be met and it may be a financial disaster.If you buy/renovate a property in Class D area to Class A standards, what quality of tenant will you get?

They offer a $10K repair fund to fix damages in addition to SD plus warranty for appliance repair etc.I have no say in whom they choose to move in, whether there are animals, limit on # of occupants etc. they reserve right to inspect property so i have no idea if they can tell me to remodel, paint etc.does this make sense i have a vacancy coming up in October (bad rental timing).

Maybe they would/could take it upon themselves to pay for the repairs to the roof to salvage your unit and prevent further damage then they would go after the HOA to recoup costs.

I've collected thousands in security deposit from my guests who've caused damage.

So, make sure YOU understand the copy & paste info below:Recommend you first figure out the property Class you want to invest in, THEN figure out the corresponding location to invest in.Property Class will typically dictate the Class of tenant you get, which greatly IMPACTS rental income stability and property maintenance/damage by tenants.If you apply Class A assumptions to a Class B or C purchase, your expectations won’t be met and it may be a financial disaster.If you buy/renovate a property in Class D area to Class A standards, what quality of tenant will you get?

I would love to maximize cash flow but also do not want to be left on an island if there is damage.