I have substantial money down to more than pay for the legal proceedings and fix most damage.

The damage could be as low as 70-75k.

Yes, you can do both, but technically you are covered with the Option deposit for any damages as well. 

No important belongings were damaged because we kept everything in bins on shelves, so damage done to our personal property is not a concern. 

I am willing to take the risk rather than absorb the issues of a 'problematic' tenant and damaging my relationship with my property manager or the condo building the unit is in.  

My leases don't have rules about hanging things outside, but they do say tenant is responsible for negligence or damage.

Also, would you go after the PM for damages after failing to inform the property owner since he had the info? 

AmirAs a structural engineer I would recommend that your first step is to contact a reputable investor friendly structural engineer to assess the damage and provide some preliminary repair options. 

Your tenant leaves after a year, you get in there and find dirty floors and carpet, have to touch up or new paint, various broken/damaged items. leaks under sinks ruining cabinets, etc...

He did not find anything major, but noted that there is minor termite damage (which we already knew) and the electrical panel is from a brand that has had noted failures.