They failed on all three of their responsibilities.My job is not to tell tenants how to live unless their lifestyle is damaging the property or interfering with another person's right to quiet enjoyment.

In terms of moving to Chicago, I think that decision should be based more on if that's the preferred lifestyle of you and your gf.  

Fresno & Sacramento average houses are $300-400k so with 1 wage earner in a house hold of $150k that would be very doable plus the life style would be quite good.

Going forward it will help if you know the (C-) lifestyle and "Culture" for the area you are renting out.Buy here--pay here vehicles, Rent-to-own furniture (at best), friends and family with "Records" (not the vinyl kind), Dead junk vehicles awaiting some never to happen repair, financial tightness and sometimes irresponsibility, rely on friends and family for help, etc, etc, etc...If you know and understand your "Customer" it will be easier to make money from them, than if you expect them to behave and have the same level of lifestyle and financial responsibility as B+ renters.In other words, don't expect a Camel to have no humps, and don't expect it to be a horse.Just my 2 cents.

Personally, I see more value in this, both from lifestyle and actual financials, then I do holding onto property long term. 

She grew up in a paycheck to paycheck kind of lifestyle though so it's been a little difficult to implement saving into her lifestyle.

For example, if you guys value be "free" from the lender and you want to be moving towards an "all cash" lifestyle in which you'll NEVER have a creditor's "due" showing up every month, then that's a pretty clear path forward.If, however, you value scaling to X point, then you'll likely get there faster and easier using leverage than not using leverage and you might find that the $100k is better used with RE investments while you continue to pay a 3-6% rate on your student and car loans.  

If instead the current landlord had slowly raised rents to be closer to the current market rates this tenant may have been able to adjust her lifestyle to adjust over time or would have found a place more affordable.  

Personally (and as someone who operates a property management company, I probably see more of this than most people will) I've incorporated a "not my problem" policy into my lifestyle because otherwise it becomes very easy to get bogged down by other people's life issues.

When they want to upgrade their life style or need to change location.There is nothing wrong with sending a holiday card thanking your tenant for their loyalty, but I wouldn't do any more than that.