Given the details you provided, I personally might not want to settle this in mediation with this tenant however as I'd probably just want a judge to cut through the BS and tell them to pay up and get out at this point.

Automated FAQ videos to cut down on repetitive conversations. 

For consulting with a CPA.As mentioned above you can simply take monthly distributions, but what is most important is how you are set up. 

It simply depends on your time frame, when you want to actually begin renting the property out short term, and what the loan terms are.

Without rent control i either raise their rent far above market rents so they give me notice (my preferred method) or i simply do not renew their lease.

Further, I had negotiated 12 months interest reserve; they cut that to 3 months.  

Is it best to simply increase rent by a fixed amount (e.g., $700) to cover this, or are there other strategies for handling utilities in this situation?

After I cut he and his now wife loose I sold the property for more money 30 days later after we they made fake jim.bakker promises for 45 days. 

Usually when a landlord cannot find qualified tenants but are getting a fair amount of inquiries there's an underlying real estate problem and the qualified tenants simply do not want to live in that location.

My favorite way is is simply using Pricelabs using a comp set, OR using Airbnb itself to see what your direct competition is.