If they complain to you about a guest problem (noise, whatever) apologize, deal with it, then send them a big gift basket or something.Better yet, run your STR somewhere without an HOA

Baltimore, the gift that keeps on giving. 

Not a romantic notion of some HGTV show, but the reality of rehabbing and all the risks involved.

Considering the holidays and people spending more money on parties and gifts, I was wondering if this would make it too hard to sell the property/would drive the price down due to lack of activity?

This would be perfectly fine and something we recommend if a parent wants to 1031 into a house for a child - Make a lease, collect rent, declare income, and then gift back to the child if you really don't want to collect rent.It sounds like the way you've done it is a little fuzzier. 

But a gift is OK.

I like the idea of a gift card to a local market or a nice restaurant for a dinner out. 

If my tenant pays on time all year (only had 1 problem tenant) I reduce their December or January rent by $100 as a Christmas gift and goodwill. 

Even ignoring the 'theft' risks, you have gift tax return exposure (and use of lifetime exemption), transfer taxes, no basis step up involved with gifting the property back and forth, probate risks if the 'buddy' passes away and didn't update their will for the property. 

That puts you in a property now if you've got the down or can get a gift from family.Alternative is saving to buy the land for cash (very few land lenders) or ask to have a seller carry.