After getting under contract, it was brought to our attention after requesting copies of the leases that the current owner did not put the tenants under a physical contract, nor did he collect security deposits.

Think of all the things that could go wrong and see if the lease addresses them: unauthorized pets or tenants, early termination, security deposit, lease violations, late rent, eviction, lawn maintenance, parking, etc.5.

. $1000 security deposit.

I'd rather take $600-700/mo fixed and hold a security deposit than get $900/mo from 10 different airbnb guests, have to clean 10 times, etc.

The security deposit doesn't even come close to covering the damage.

I even offer them their security deposit back if there is any repair work to be done because of them if they are willing to do the work themselves and pay for any needed expenses.

The owner/landlord that I bought the property from was renting them out way below market value with no security  deposits or written contracts.

Think of all the things that could go wrong and see if the lease addresses them: unauthorized pets or tenants, early termination, security deposit, lease violations, late rent, eviction, lawn maintenance, parking, etc.5.

And no, you will NOT get your deposit back if you back out. 

Isaac Braun you are owed rent until it is RE rented plus any damages (security deposit - Paint, flooring, etc) plus RE-leasing fee or lease termination fee if it’s in your contract.Most highly qualified people won’t stop paying rent, forcing you to evict them and get a $$ judgement messing up their credit.