Re lease break fees.... check your local laws - it is usually only 1.5x rent and you have to mitigate damages in good faith 

Additionally, it would be advisable to seek guidance from experienced professionals in this field to mitigate any potential risks.

And if so, what steps should I take to mitigate risk? 

Or know how to draft contracts for contractors to mitigated by their normal downfalls.

If done right- you can make a better return than you can with A Class and B Class rentals.I personally invest in some D Class because I'm confident that we can mitigate some of the risk with quality management processes and familiarity with the broken Philly regulatory environment.

New development is certainly an obstacle we face in most asset classes, so we do our best to mitigate that possibility by buying in strong, growing markets, with strong current demand. 

Even if rents are high enough only a low purchase price might mitigate the costly vacancy risk.

These courses of action include most likely obstacles and how to mitigate certain risks as best as you can.

Yes, that seems to be the general consensus for renting to grad students.Pros for renting to undergrad students: increase your tenant base | minimize vacancy rate Cons for renting to undergrad students: Potential more work/headache | Higher expenses | higher wear and tearPotential mitigation to overcome the cons: "Harden" the units before renting them out (which i think in general would be a good idea depending on who your tenant base is) | Plan for added expenses | Solid lease terms | Possibly have parents co-sign | Have 1-1 discussion with the student/s before renting them out so they have a good understanding on the expectation's/"rules": I think in majority of the cases it will be the first time for the undergrad students to be living on their own so educating them on the guidelines should help

Odor mitigation is also an issue and is quite the art to do effectively.If you do move forward on the property, I highly recommend finding a fire restoration company/contractor to walk the property with you and give you a good understanding as to what needs to be done.I'd be happy to help in any way I can--look at pictures, answer questions, etc.