I don’t believe a tenant can stay forever, and I can cover the extra payments and lawyer fees for up to two years for the tenant who will be harder to remove.

Can they make a payment then remove all the appliances, the HVAC, etc etc.

I would consider this a very loose agreement for an arm's length deal.

Assuming it will be Single Member LLC (you as a member/manager), it will come back on your schedule E anyway, so only thing you loose is $800 in california and bit more of paperwork but that preps you for future.Note - this is a very high level advise and mostly a personal preference. 

You should have removed her at the end of her first year. 

You also have lawn and snow removal in multi's, where SFR tenant is responsible.Finally, SFRs typically garner more rent than multi's, for same bed/bath/general size.  

I think he had some self promotion in the post and mods removed it @Paul Ewing

Fences, basic landscaping, tree removal can put some nice padding into your margins as well. 

@Dennis GallagherIt's my understanding that the "Income-Expense Ratio" primarily use operating expenses as the expense variable, which includes costs like utilities, property taxes, insurance, maintenance, repairs, property management fees, and trash removal, all of which are considered when calculating a property's operating expense ratio (OER).You calculate OER by dividing the total operating expenses by the gross operating income of a property.

We removed a chimney to open up the space and updated all the major ticket items—new electrical, HVAC, and roof.