That will be sufficient.

This option is more of a personal preference and emotional choice, rather than just purely financial.2.

Your choice.  

In the small resort where I enjoy time at my Spanish property, which lies in the just beside the picturesque Bay of Roses, people from all walks of life and of all nationalities – many of them non-EU citizens – have been enjoying life there for many years, moving freely to and fro.Brexit or no Brexit, British people will continue to be able to buy property in European countries and live in them, just like nationals from non-EU European and non-European countries have done for decades, even centuries.In my mind, I believe sufficient mutual appreciation exists between Spain and its significant number of British homeowners to minimise the potential disruption of Brexit to British homebuyers there, now and in the future – not forgetting the millions of euros that British tourists and homeowners bring into the Spanish economy every year!

Depending on your loan balance, you may be under water.If you will need to purchase another home to live in after the sale, and you purchase a home around $350,000, you may have to put down $70,000 and that will likely eat up all of your sale proceeds if any.So, it seems like the choice is to either to rent your current property for $285 cash flow, then purchase another home to live in from your savings, or sell the current property, then purchase another home to live in from your savings, or stay in your current property and buy a new rental property from your savings,I would stay in the current home, because you have already upgraded it to your liking, you would not have to go through the trouble of packing up everything and moving, you are already familiar with the neighborhood, and your savings could be invested in a new rental property with much better cash flow, with the tax advantages of interest and depreciation right offs, and with another property to get appreciation from. 

If I make full disclosure and provide the pamphlet, then it's the tenants choice to assume the risk... 

There choice not to pay is affecting others and needs to be taken care of.Hope you can get the issue worked out.

I don't know how to fund this endeavor or what the best choice would be for us.

Make sure you have sufficient knowledge before pouring time and money will probably lead you to better results!

I've only made ONE poor choice over the years and nothing on paper will tell you the applicant has no social skills and can't get along with other tenants.