She now is asking that I move out my long term tenant because he broke the lease by having a dog and not paying for a pet deposit (a conversation they both had).

Also the lender will not " like " the fact that now there is a large deposit, must show where it came from 

Last night they emailed us and said they will put the deposit down but they won't be moving in until January 1st.

If there are any deductions to your deposit, I will give you an itemized list of charges and the refund of any remaining deposit.

That is required where I am if I'm going to keep any part of the deposit.

Get insurance, make sure you have all deposits.

Make sure you are asking for a good sized deposit, and when renovating, use materials that are hard to damage (LVP on the floors, higher sheen with the paint, higher quality faucets, maybe solid doors).

Also, good luck getting your tenants Security Deposit back if you utilize their Escrow account service. 

. -- which you want to avoid to avoid having to deduct security deposit charges (or increase security deposits next time around in order to pay for pet cleaning/deodorizing).

Currently, explain to current tennats about an eviction will effect their future rental options as opposed to taking your offer of 100% if security deposit returned plus some moving expenses cash.