Does anyone have experience in the dirty world of septic and renting that could provide some insight?

The penalty does seem high (3 months' rent to cover 60 days of vacancy), but that is what it said and you and your daughter agreed to it when you signed the lease.

The same problems and policies that contribute to the things that make the headlines in SFO also may contribute to huge barriers to entry for new construction, inflating rents and asset values long term.

8.5% is a bit high on the rate but that's our current market.

For example we have one rental that has 3x in value and day 1 it was around negative $200 cash flow, today it is +300 cash flow but also have a huge equity and the tenant has also paid all the principal on this property. 

If the Borrower moves back to the original area, the Borrower is not required to live in the original house and may obtain a new FHA-insured Mortgage on a new Principal Residence, provided the relocation meets the two requirements above.

Reno, NV, is a prime investment spot due to its strong property appreciation, with values rising over 10% annually.

How does this trend not double home values there in the next 5 - 10 years?

This is a Maryland Historical Property, zoned for residential high density, with specific limitations on its usage due to its zoning.The property is massive, offering 8,276 square ft of space, including 5,445 square ft of finished area, and it features a substantial driveway.

When I sold some lesser properties during recent market high of end of 2021/beginning of 2022 I chose to pay the cap gains.