When I finally put a stop to it all I was the bad person and there was some serious friction because I was perceived to have gone back on my word.

Granted not every tenant is like the other but, I have to exercise prudence and use wisdom to avert and mitigate any possible snafus.So, when renting to anyone I am very frank, not crass or rude, I am firm and what I perceive to be fair and when i'm not my property manger helps me.

Never cared for home warranties, other than perhaps a somewhat delusional advantage perceived by the buyers.

You don't want dissatisfied tenants talking about what they perceive as your lack of response and maintenance to other tenants.  

If you have a ton of prospective tenants clamoring for the property, you might as well hold on to the $3k and approve one of them.As always, be careful that you aren't running up against any discrimination laws or could potentially be perceived to be.

If you perceive the risk of knowing about this behavior and doing nothing about it as low, then do nothing.

I also have this mind frame of feeling like the tenants are doing me a favor by living there and paying what I perceive to be a "high" rent.

If you learn what things will provide more perceived value in the eyes of your tenants, higher prices will be justified accordingly.

They view the world differently and react differently to things they perceive as transgressions in their space.

The first step in addressing any concern is to acknowledge the concern (whether it is real or perceived).