I don't know if the situation with the "nasty" tenant is salvageable or if there is any legitimate basis for their treatment of you and your staff. 

A friend of mine in his early 30s got hit with a $13 million dollar bill for a cancer treatment.

" Bring in drug addicts and drunks to the neighborhood . 

Plenty of companies can do a AML check and you can make that cost as part of your origination process.As a FYI, we had someone fail a AML / KYC check because they were a former drug runner in a cartel.

With all the random cars that keep showing up to the house for 10 minutes a pop and then leaving and it being all different people I think this could be a drug problem. 

A drunk , drug addict, gambler always needs one more fix and you are helping them.  

With that treatment, you may receive a step up in basis for one-half of the property when a spouse dies.

The losses could be used against other sources of passive income and that is it.If it is a standard self storage model, and thus treated as rental income, then in order to get anything other than passive treatment you would needs REPS status. 

I’ve been spending time there since I was a child and it feels like a great place, (except for the high crime and drug use, areas which I would never invest in…).

It's doing the pre-access drug screens for new contractors starting their jobs at the refinery.