I have found good tenants in that price range to be a challenge, specially finding folks who dont smoke!

Who/where do you use to handle demo?

Once terms are agreed to (move out date, buyout fee, how the deposit will be handled, etc.), we will sign a simple lease cancellation agreement, coordinate the payment and move out and we're both moving forward, tenant being released from the lease and landlord looking for the next tenant.

Can you suggest any way to handle my problem?

Personally, I have found this middle ground to be the most challenging.

Your tenant was capable of signing a lease so they should be capable of handling their own communication.

So while a lot of people made money by holding to rental properties in the prime areas of Austin by values going up, it can wipe you out if you’re not financially prepared to handle emergencies.

I'll let @Yonah Weiss handle that.

The challenge is this would be my first home I would ever have put an offer on and there is a lot of interest in the house already since it is such a low price for the area.

I'm hoping it's the latter.If you can't handle living in the privacy of your home (or rental) without an animal, you probably need to be a psychiatric care unit.