We are considering going to the county office and adding her name to the deed but wanted to make sure we understood the problem first.Some extra details that might affect what's happening:- My wife is on a temporary greencard.  

Because in the end the bad tenant is liable to cost you a lot more, when you deal with their late payments (emotionally), their treatment of your property (financially), and oftentimes their evictions (emotionally and financially).    

I have an engineering background so I am more grounded in logic and numbers, rather than emotion and feelings.  

Johnny, reading between the lines I am getting the feeling that you are starting to get emotionally involved with this property... this is not good.To successfully progress an investing career you have to accept that you may win some but will probably lose a lot more.

Screen carefully.All of that said, returning the full deposit would certainly be the lowest emotional cost approach.

That's an accidental landlord return in Portland and not an investment quality return assuming you have no emotional attachment. 

If there is any way to make a temporary repair to get you through the winter your labor charges for traditional trenching might be considerably lower.Angie's List on Sewer Line Replacement AlternativesBest of Luck,Scott Dixon

All the imaginary money game did was provide a method of getting the emotional or desired aspects to an agreement of dividing properties.

Plus the L.A. was so emotional about it, lol--which led me to believe they didn't have any other offers.

It was a mortifying tail between the legs moment, but my primary emotion was blame towards the tenant.After we sued and won, we never saw a dime, but the judge proclaimed that we were right.