If there is damage (extensive moisture, cracks, holes, etc) is may not be a bad idea to replace. 

If leases are done separately how do you account for damage to the property in a common space (i.e.

She had a former tenant that did some damage but most of what I see is wood rot, possible roof issues, and other damage from not being able to care for the home.I have begun to approach her to discuss the cost of upkeep that ultimately is eating away at her living costs.Is there anyone investing in this area whether they are renting or fixing and selling?

You can do a lot of damage towards your long term success in the beginning stages of a fledgling STR business in this market.

Be sure to ask about cleanliness, whether there was any damage, and if they were difficult to deal with.

Bryan When a tenant does damages and you pay a handyman or anyone to do the repairs and intend to make the tenant pay you back, it is never considered INCOME. 

This means that no pet deposit and no extra monthly rent for a pet can be charged.However, landlord can still make tenant responsible for, as examples: all damage caused by the animal, adherence to all governmental and community rules and regulations, ensuring safety of others, ensuring no disturbance of peaceable enjoyment of others in their residences, and so forth.Hope this helps.Barb

Thankfully they noted the issue and let us know prior to any damage. 

Any damages to the property? 

It's also one more thing to complicate your rental house...it can leak, it can fail, it can get damaged by hail, it can blow off in a wind storm.