Whatever cost to you (likely not astronomical) you could divide it by 12 or 24 and add it to her rent indefinitely to include the added utility cost (also likely not much).

@Pandu Chimata,  as others have mentioned above, a 1031 exchange is the best way to defer capital gains taxes indefinitely.  

That's going to be on top of that $60K gain you anticipate and taxed higher - 25%.So it's big tax bill or a 1031 exchange which would allow you to sell this property and purchase other investment property and defer those taxes indefinitely.

This isn’t a tenant that you want who is threatening to sue before even moving in. Definitely

Did you purchase the property with the original intent to hold it indefinitely as a rental, but just got an offer you couldn't refuse?

Let's just say the cost to remediate and remove the shingles would have been enough to kill my cash flow from the property indefinitely. 

You get to defer that tax payment indefinitely and use it for your own profit.The end game for you would be to use the 1301 exchange process as you buy and sell properties until you finally 1031 into a building to house your gym. 

It will not defer  your tax indefinitely. 

So you would get to continue the depreciation that you carried forward and there would be some addition to depreciable basis as well.Third you can use the 1031 to keep depreciation recapture at bay indefinitely. 

Cant be indefinite I assume...so this may have postponed the issue, so don't let your guard down and be prepared for this being an issue againI would have serious conversations about the current set up is going to only last so long, so lets plan on whats going to happen when the charity dries up.