I do not know about you but I would not be thrilled to lose a single property even if my other assets were protected.In CA, the LLC has an $800/year minimum cost.If I get sued, I like to know the insurance company has more to loose that I do. 

We'll be losing rental income for that time period and some very good tenants.

The way the the bidding works in MD, that means those bidders are likely to lose money if the owner does not redeem and if the do redeem they only make a couple of percent interest. 

Do leases lose authority over new owners?

I just don't want to lose money....bad investing etc. 

Our position is too many things in life happen - tenants lose jobs, get divorces, die, etc, and are margins are so small to begin with that we cannot afford to take on all the risk.Some PMC's do offer 12 month replacement guarantees and cover all eviction costs, etc, but they usually only do that on Class A properties or have an assortment of loopholes out of their guarantees.

This potentially caused us to lose out on a few other tenants who were ready to begin the lease ASAP, but we decided to go with this couple because they had better credit scores and financial situation.Does anyone have any advice on ways to prevent this from happening, such as including a fine for people backing out or requesting the security deposit upon signing of the lease?

I’m not losing much, it’s the idea that gets me.

The rate of return isn't great, but its just a place to park money and not lose so much value to inflation while it sits.

I see people buying left and right - however when I "work out the numbers" considering income (rents) minus - mortgage, taxes, insurance, vacancy (5%), maintenance (5%), cap x (5%), and sometimes PMI the properties just do not cash flow and sometimes lose money every month.