I was thinking that I could purchase the home and do NOTHING to it and simply collect rent.

At very least, I can refer you to great local resources (brokers, attorneys, contractors, etc.) to help you take this one down!

If I should manage myself what are some good tools to use for background check on tenants, rent collection, etc.?

You are going to spend $100s of thousands of dollars to purchase a property in the GTA and think you have enough resources to present an offer.

I don't really want to buy it back being so far away and not having the resources to manage it from here.

Case in point Holiday falls on the first of the month which is a Friday, and their company pays payroll the day after a Holiday which is Monday. expecting payment Thursday would be a bad idea, because that means they pay their rent a near week before payday.I would deduct from their security deposit for fines, tenants are living in a high value asset, they can destroy property confrontation should be avoided.You should take responsibility for pest control its your asset you are protecting.Steep fine for painting, you might as well say eviction, you will never collect that money.Don't restrict your payment methods. 

It's a great resource for information and help!

Option 2 will cost you attorneys fees, filing fees, service of process fees, etc.... some of these can be collected on the back end if you get a judgment, but the attorneys fees typically aren't collectible. 

This was super important for me: Make sure you understand the difference between the types of interests and rights that can be passed along to an heir, for example if your agreement is set up so that your partner's SO gets his share upon his death, does that person only have economic interest (just gets to collect their half of proceeds) or voting/decision rights?

I just remembered what one of the terms of that contract were -- that the owner opted into the PM's online rent collection system where everyone paid online for free or paid something like $10 extra a month for non-online payments.