file a schedule e every year and take depreciation but thinking that may be wrong. 

Schedule E for reference below.

@Lynnette E. thank you for your input.

I would try to segregate the expenses as operational cost as much as possible to create the rental schedule E loss rather than decrease schedule D gain for a better tax impact. 

So I ha e a lot to go o er I will try to be as detailed as I can.

I'll let you know how much it will cost; then you can let me know if you want to proceed and I'll send you a lease addendum to e-sign.

You can expense property taxes and loan interest on your Schedule E. 

A quick-and-dirty valuation of 16X earnings (average P-E ratio of U.S. stocks) would put the value at nearly $1MM.

This may be moot if he needs to waive something for the deal to proceed.Where it comes into play (I've seen it before), is if the buyer made some E/M non-refundable prior, then I'd think he's lost that non-refundable if buyer doesn't perform.Again, we're missing the original PSA for terms.

If she never met the landlord in person, then she would have e-mail, phone number, text messages and similar evidence.