Given it's a small-sized condo (550 sq ft), do you think this would negatively impact a potential sale?

This may not be the case in your market or properties, and sorry if this is a "buzz kill" for an otherwise happy post, but wanted to mention since most folks don't consider this when buying and holding since they assume that as long as it is cash flow positive day one then that is all they have to care about, and appreciation should be ignored (even if it is negative), which is not the case IMO.

I know you can repair the home to negate the profits, but is there a reason that we are the only profitable rental?

I heard a statistic (90 percent of statistics are made up on the spot.

Very simpistically, ignoring capital gains taxes and accumulated (negative?)

It also typically negates any inspection and appraisal contingencies.

I looked up apartments reviews in college towns where room-by-room renting was going on and just saw a flood of consistent negative reviews.  

It should never be necessary to remind tenants they owe rent and most likely received in a negative way. 

...proof that one didn't know enough at that point in time (<-- giving it a positive spin)...proof that one didn't pay attention to what one was doing (<-- giving it a negative spin)...will always happen and are an integral part of a learning process (<-- to close with a positive spin!)

So go ahead with the purchase even it is a manageable negative flow.Are there other costs associated that I need to know about?