It just seems kind of excessive to have 4 people paying $40 each.

May seem excessive but if you have to evict a tenant and it takes you 2 months and a months rehab.

What would be a good (and not excessively expensive) method to make this presentable for tenants to use and spend time in?

@Gernot Bucheli - For example: If you own a dry cleaning business, as well as the building that the dry cleaner operated out of. 

I ask because at the moment, and as Joseph eluded to, with how little inventory there is to purchase here coupled with the massive (and still growing) demand for housing both on the investment and retail side, solid deals that will produce good cash flow are fewer and farther between and so heavily sought after that when they go to a multiple offer situations the margins dry up pretty quickly.

My wife will make in excess of $100K as a teacher.

Everything you accept beyond that is considered excess security deposit and must be returned.

Households have also accumulated $1.8 trillion in excess savings.

@Brandon Lopez  This is a really bad situation and has the ability to bleed you dry in a hurry. 

You can try and have your tenants start calling the police for nothing other than making the party stop the moment excessive noise is heard.