But, in a practical world, I don't know them from a hole in the wall or what they're capable of, and would like to avoid any potential retaliatory damage, or even forcing a legal eviction onto their records due to true market sticker-shock/lack of savings. 

Consists of repairing holes in walls and replacing flooring and the front door frame and door. 

Most of the painting is in tact, there are few sections on walls with stainsand holes due to nails from previous tenants, I initially thought of doing it myself but I am afraid it may start looking patchy.

Then, the buyer cancelled after the home inspector told him the foundation was leaking because there was because the dog urinated on the walls and the baseboard had bubbles on them on the entire first floor, on an inside wall on the 2nd floor hallway and in the master bedroom on the 2nd floor.The inspector also wrote in his report that the stucco walls were damaged because I removed a satellite dish and put some caulking in the screw holes.

When on vacation a year later I drove by the house--still had dirt filled holes in the driveway, and they were parking there, so I know that hole does not have sand! 

You could get a pocket door but you would need to cut a big hole in the wall to install it. 

There is no duct in the bathrooms on this duplex, I know the best option would be to put a hole in the wall but I do not plan on doing that. 

The apartment is really dirty, tons of nail holes, a broken ceiling fan, and ants everywhere.

Also, unless there are holes in your story or you just wrote it wrong here you and the tenant are talking about 2 very different things. 

What is the gap between sink and right counters that has dishes on top that seems like a black hole for dirt, maybe was a trash compactor that no one uses today?