However, in your situation, it is a disagreement on the leasing price, I would think in this situation, your tenant should vacant the property by the date the lease is over. 2) Do I have the right to not renew the lease, given that I do not agree to their counterproposal?

I'd give him the legal notice, and return his deposit (yes, it will be painful, but if you don't have proof, IMO it's a lost cause, not worth the hassle/stress) , and offer him a sliding scale, $400 if he moves out next week, $300 if he moves out in 2 weeks, $200 if 3 weeks, contingent that he cleans up the place too.  

I am looking for some advice on how to handle a difficult situation with a contractor.

A few more questions that might help folks understand your situation.1.

You just have to inform tenants going in about the situation. 

As others have mentioned, depending on your family situation - IE schools - you should be able to find a 2-4 unit that you can purchase with your VA loan.  

First, some questions to clarify your situation....At what point in the eviction process did the tenant vacate?

I will again stress that real estate is not a arm chair investment.

@Roger, your situation sounds unique and could present some issues if there is a loss at the location.

The tenant is on a month to month lease which I think would be beneficial in this situation.