Miles of bike paths, rentals, a water taxi, and many beaches to choose from.  

Formica counters looked to have a medium degree of water damage here and there. 

When using the Rental Calculator should I adjust my prices so that they reflect only one flow/unit of income and keep all my vacancy rates, cap ex, maintenance repairs, water, etc... all the same?

If not, then I "just" have to pay taxes on the difference (net sale of the old home minus purchase price of the new home)- Can I use the closing cost amount of the old and new home as part of the tax free money I can spend from the 1031 exchange or these closing cost are purely out of pocket amounts?

I actually think it's ignorant to believe one is truly better than the other.It is inaccurate to simply compare purely numbers for ROI.  

Option 1) buying in cash for self use 3 year cost/gainGainsestimated 2% property value gain per year on $200,000 (cash cost of house) = $12000losseshouse insurance per year $1000 = $3000property tax $2000 = $6000heat and water = 700/year average = $2100 lossupkeep of house = $3000 (3 years)total loss =  -$2100 (3 years) ------------------------------------------------Option 2) renting an apt/house for self use 3 year costGains $150/m maybe on $200,000 bank interest gain = $5,400 (3 years)Losses$1000 per month = $12,000 = $36000 (3 years) (no heat and water costs, no home insurance, no property tax though)total loss =  - $31600 (3 years)-------------Option 3) investing to rent out house entirelyprice of home $200,000 gain $12,000 rent per year at $1000/m = $36,000$12,000 % increase per year value = $36,000(at estimated 2% value per year increase)lossinsurance per year $1000 = $3000property tax $2000 = $6000 (3 years) $150/m maybe on $200,000 bank interest gain = $5,400 (3 years)heat and water = 700/year = $2100 loss (3 years)upkeep of house = $3000  (3 years) total potential gain $72,000 over 3 years - $19,500 losses Total gain =  +$52,500 (gain in 3 years)--------------------------------------------------I never really realized there was such a difference.

. $700 is what I net after management fees and water service.

Everything filthy, water damaged window sills, carpet is pretty trashed from pet stains.

The home needs brought into the 21st century, but has no major issues (new roof, new windows, good furnace, A/C, water heater, etc.).

*If they bought our land and house they would gain:plenty of frontage closer to the site..easy access for water, electric..If they want to run it.