Some have had what they think is success with that numbers wise, but their properties get destroyed.

The tenants will most likely in a couple of years destroy carpet / wood floors.

This is a mistake, a mistake that might cost you from being able to close on that particular loan type, and it could make you enormously liable to the Seller because you will have effectively destroyed their ability to sell the home to another Buyer for FHA financing.  

The Renters Insurance Policy's I reviewed included coverage for "Vandalism"(Vandalism is an offense that occurs when a person destroys or defaces someone else's property without permission.)

Hi Vikram, yes a h/o's credit may be shot at this point but it isnt destroyed.

Capital gains rates at 15% if in  25% tax bracket, on 20,000 profit gain is 2,000, while significant, to me the hassle, the delay, tying up my money, and the potential for greater loss if the buyer destroys the property... would not be worth the potential increase profit. 

Staying with them long term will destroy any type of profit you may have.

My understanding is that the algae in the shingles can also destroy ththe shingles over time. 

Not only that, they  also destroy the property of the helpless landlord, and live rent-free for months (or years)!!

Much of the housing in the area was completely destroyed.