I used protective ear plugs and ear muffs during this year, along with making contingency plans about moving if the situation didn't get resolved.My takeaways from my experiences are to be persistent and learn the rules of the system.

Such as does the current asking price and monthly rental income meet the 1% rule.  

@Colleen Fiumara A rule of thumb I use is based on a 30% return based on the total cost per unit.

You may want to add addendum's and rules and regulations as part of the lease also.

The framework problem is completely separate issue which has nothing to do with her or her month to month lease ... as long as you have her proper notice that you would not be renewing her lease again then you shouldn't have a problem BUT section 8 might have different rules which I'm not familiar with.

@Anthony GaydenI do have a little motivation in the fact that it is the "Golden Rule": Treat others like they may have secretly hoarded $9Mil and have nobody to leave it to.

Nothing I’ve seen on MLS comes close to the 1% rule though... just don’t want to throw away rent for him.

(Part of this was timing since the existing lease was coming up on its expiration).2 - As others mentioned, make sure you understand the rules of the program and educate yourself ie. annual inspections are required, need to use the same lease terms as other properties, rent increases may need to be approved by the housing assistance administrator well in advance, etc.

Investing is all relative...for example, I'll take a B-class property that breaks even every month over a C-Class property that cash flows $600/mo. because it works better for my plan and style...the point is that any rules about returns are crap. 

Especially if purchased in Chicago where the rules are more relaxed and I can rent out basements.