Am I legally bound to reduce his rent at all?

Sometimes, lower or finance offers are accepted because they offer reduced inspection days, higher deposits, secondary deposits or closing dates that are beneficial to the seller.Hang in there!

Cost was about the same either way.I guess I am wondering if there is any other way to do things that will reduce the legal overhead and cost.

Monthly Rent: $1,700PITI: $809Property Management: $221 (13%--I feel this is high & an opportunity to reduce this expense)Vacancy Rate: $119 (7%--this is based on our initial vacancy so I think it's high, but I'm using 7% to have a safety margin of error..

Floor has a slight slope to it.3. laminate flooring was put in incorrectly 4. stress crack along with minor water damage on ceiling and walls5 new roof6. no appliances 7. the washer and dryer connections are in the kitchen8. has no central air (95%) of the houses in the area have it 9. need landscaping 10. gutters11. wall trim is in pieces12. some paint since im sticking to white ( very popular in the area)13. doors need replaced14. full remodel of the bathroomAlso the furnace and water heater are exposed in the bathroom (looks very weird) and it does have a garage or a basement but crawl space.

Paying it down will likely reduce future costs of borrowing for real estate.

I am currently building a tiny house to live in to greatly reduce my monthly expenses and travel more freely.

I know keeping rental renewal rates a bit below market reduces turnover, which saves more money for the owner in the long run than higher rents bring in. 

Labor force participation is much lower (lowest level in decades) and wages have been stagnant, adjusted for inflation, so fewer people working at the same rate of pay, reducing aggregate purchasing power... 5.  

There will of course be expenses which will inevitably reduce this 12% annual gross income figure down to 6-7% most likely (cap rate - net operating income/price+cost).so to get your 10-12% cap youd have to have an annual gross of 18-20% which means 1.5-1.70% monthly gross income to sales price+ rehab cost, unless if you drove down from redmond to tacoma and did your own management, repairs, lawn care, etc.