Consider all the things that could go wrong and see if the lease addresses them: unauthorized pets or tenants, early termination, security deposit, lease violations, late rent, eviction, lawn maintenance, parking, etc.5.

I offered to add the 2 dogs to the existing lease for a refundable deposit of one months rent. 

.- Almost impossible to get any kind of unit damage paid for beyond what you have in a security deposit The rest of your statements about the homes needing a ton of work, contractors costing the same, and dealing with properties that are very tough to force appreciate are spot on.I personally do not invest in Section 8 housing anymore because they are normally cash flow purchases.  

In addition to trash and some other problems I'm wondering if the theft is enough to keep the deposit.

She found a house, i paid the usual fees (pet deposit, security deposit, first month rent.)

Solera on the other hand can accept mobile deposit of up to  $1Million!

The security deposit is approximately 10% of total repairs so it won't cover most of the damages.

When you renew, you can add a pet deposit with the new lease. 

The vast majority of lawsuits against Landlords are for wrongful eviction, security deposit disputes, and Fair Housing Violations.

@Brady HerbaughIf you decide to house hack, set up a separate bank account to deposit the rental income and pay rental related expenses.