Currently it's not rented and just sitting. 

After it sits for 4 days (to let all the germs die)I've been pondering on collecting more than first months rent or increase security deposit or prepaid rents till everything is calmed down. 

I can get this extended but who knows how long COVID-19 is going to disrupt our lives and who knows where the market will be after we are back "normal" and lots of lost their jobs so certainly want to do everything to not allow this to sit.  

I would encourage you two to sit down and talk about what you would like be true of this property (in 1 year, 5 years, etc) and make sure that you both thinking of the objective as the same. 

Where I think it maybe it is a personal business decision is when you have say 100+ properties and on average that is 9k in reserves each so you are talking 900k sitting on the sidelines in a bank account paying little to no interest and then with inflation you are essentially having your cash lose value month after month. 

Stock wise, I pick blue chips and sit on them forever.

Id have some back up strategies no matter how good a deal i think im sitting on.

In our case we aren't pulling any cash out, but if there is ever a time to have piles of cash sitting around now is it. 

Subtract the 5k in taxes and three years from now I’m sitting at roughly 20k earned by moving the funds from 401k to the property. 2) By moving the funds from my 401k, I lose on having to pay 5k in taxes, and the anticipated 6-9% return on the 401k as it sits in the fund.

When you are sitting at 30% leverage, you look like an idiot in good economies, but stress free when the world shuts down and goes into a global retraction.Finally, have a long memory.