Based on your income you are going to be limited to a purchase price of $200,000 or less. 

It has been often suggested here and elsewhere to pursue something that keeps a toe in the water of the working world, as it limits the downside risks, and could turn into a fruitful enterprise for post-retirement.At the request of a friend and BP associate, I've been asked to provide expert opinion and electrical analysis on residential properties that are either on the market, or recently sold through his brokerage, as there are many customers who want a deeper look at their electrical system, deeper than what a typical home inspector will do, but they are not ready to ask a contractor to come out and simply give a blank check to 'fix whatever's wrong' (famous last words).

Sky is the limit.

Then there is the, what if your situation changes and now your limit is lower all of a sudden and you are mid purchase or mid renovation. 

Looks like a nice town, but one that probably has limited economic prospects.   

I think the limits only apply to what the Section 8 program is willing to pay, not what you can charge.

The settlement is roughly 50% for loss in the property's value, 30% for a temporary easement (I've been told this could be considered rental income for tax purposes), and 20% in damages.This is far from tax advice but I want to share what I've learned so far. 

With the limited info that you provided, I personally would keep it in my portfolio as long as the unit is cash flow positive and the outlook for the location and overall rental market is positive.  

If you have carry forward disallowed passive losses those would be subtracted, too. 

We've mostly used 20% - 25% down payments on 30-year fixed to lock in low rates for 30 years, but this limits our purchase power.