Person A and Person B would like to sign another year long lease, although Person C is only looking to stay until around June or so, at which point he'll move out and Person A and B will have a new roommate move in, who would be Person D.This is all fine by me.However I'm not sure how to handle the lease renewal. 

If you are looking at a roommate situation, you always use month to month, with clearly defined rules.

So I just received a phone call from a tenant that his roommate is on hard core drugs and does not feel safe in the house and wants off the lease.

I will make sure the parents are aware if they co-sign they need to be responsible for the full rent, not just a third, just as each roommate is responsible for the full rent ultimately.

Very few families can afford such a high price point and so you are instead left with a roommate situation and hopefully with professionals and not students. 

This is due to students graduating, traveling, or bad roommate situations.

When my son went off to college, we found it much more affordable to buy a condo for him and let his roommate pay the mortgage. 

Its just that your tenants will be your roommates.

I will make back the amount I put down in the first couple months of having a roommate. 

I heard about Bigger Pockets from an ex-roommate who was involved in real estate when we were discussing ways to invest years ago.