But I draw the line when there is risk of damage to the property, annoyance to the neighbors, health concerns, pests, etc.

And in many cases this may be warranted as health and safety issues may be present.  

Did you make sure their health provider met the requirements of AB468?  

Failure is a health hazard and you can bill her for the removal. 

I love this question, your mentality, and strategy.

On that note, if anyone is interested in tools for self-mastery, I highly recommend exploring breathwork—it’s an incredible modality for building mental resilience and focus.

Cosmetic repairs that don’t pose health or safety concerns are typically optional.Then be very transparent and communicate thoroughly to the tenant, as to provide a professional explanation for your decision forward. 

If you can get over the mental thought that you "gave away" 60% and look at the math, what the math does, I think it will blow your mind.

We had one incident where a tenant got divorced, mentally fell apart, received a dog as a gift and kept it locked in a bedroom all day.

We review three months worth of bank statements (with scrubbed account numbers) to verify income and their financial health as well.