They should have been shooting for $40k (10% of ARV), which would have forced them to either get the home at the right price or forced them to walk away.  

Hiring a professional they would use the same products; typically starting with spraying down the area (Suspend or Talstar P are excellent products) , followed by baits (Advion,  Max Force gel). 

We plan to hold our property for the long term which mitigates that risk in my mind as it's unlikely we'll be forced to sell during a downturn.

I agree with this but not all localities allow you to force the tenant to use your repair services, i.e. you have to allow them the ability to make you whole using their own contract labor. 

I've always take the path that a vacancy is better than any bad tenant - - they cause too much drama and induce expenses when they're forced out.Best wishes for you and your family.

Regarding lot size, it is worth noting that many zoning ordinances require wider lots and in some locations, the requirements essentially force multi-section homes.  

I do look to force appreciation.  

Roof replacement, new furnace, converting from radiant heating to forced air, new driveway asphalt, new windows, etc.  

I am in the Air Force currently but once my enlistment is up I plan on doing this full time.

While it is anticipated that this tight labor market will continue to worsen and harm the cost of materials, this lack in the labor force does not seem to have had a sizable impact on the cost of materials at this time.