You will pay taxes on the distributions. 

I own one there as well and do pay these fees. 

You say she can barely afford your rent but now she’s paying that rent and presumably rent at another place she’s staying?  

Though i would not mind a local house hack, my partner would not be supportive. 3.

I am optimistic that things might improve with this change, but I would not pay again just to find out.

I decided to purchase property in Pennsylvania where properties are more affordable in certain parts, demand is relatively good (less vacancy), healthy cash flow, and tenant laws are more favorable to the owner side in case your tenant stops paying their fair share. 

That would be your reserve fund, but you wouldn’t be paying interest unless you actually needed to use it.

Tenants stop paying rent all the time.

Would you mind sending your inspector's info to me as well?

They would have to foot the bill and also pay for the removal (up front) - because maybe they will work the disposal correctly, but there will be a next tenant - so that decision could have expensive consequences for them.When you present them with the true cost of install and removal, it may not be that important anymore..