A recent appraisal valued the property at $90,000 however that was a "drive by" appraisal that does not account for the condition or damage to the interior.

Fortunately we had a good security deposit, but it was not enough to cover all of the unpaid rent, unpaid utilities and property damages.

You will VOID your insurance  if ANYTHING goes wrong and you or the tenant make a claim.You will not only get the insurance canceled and thus not paid out but be liable for personal damages or injuries .... does that clarify this for you?

An agent I spoke with about this house said they noticed some setttling issues, signs of water damage in the basement, paint chipping, and a back deck that might be possibly rotted.

AirBnB also is known to not be the best about insurance, but I have dealt with them about covering some damages and they were great.

So I have control of my apartment and am working on turning it over.Downside is that the previous owner was not very good at keep up their property, and there's enough tenant damage that the security deposit is only going to cover about 1/3 of the repair costs.  

I stay away from severely structurally damaged homes and sinkhole homes as these seem harder to sell even when they are remediated properly.

The Texas Flip and Move tv show details significant expenses and damage to homes that are moved.

Then the home owner will stall when an offer comes in.Another downside to a short sale is until the tenants ( home owners  if the case) move out you cannot see all the damage to the property like with  a foreclosure that is vacant.

I would inspect the unit and if it's currently in good condition, I'd tell her that if she moves without causing any damage that you will refund that too.