Try to get her out, use the deposit to turn the property around, and try to find a new renter quickly.One suggestion: I would only forgive the July rent if she works with you to market and show the property to new applicants.

I believe IB is likely to out perform the San Diego general market.  

Look at their marketing strategy.

Here in Chicago (Illinois) you can only wholesale (market for sale) one property per year without having your real estate license.

Maybe you need to fork over a few thousand to run a market study in the zip codes you really like?

of course you have to handle the inquiries… but it’s pretty easy… we’ve done it multiple times.Your 6% appreciation approximation is less than the 7% average return the stock market  does long term - and lately it has been blowing that figure away - though as they say - past performance doesn’t equal future performance. 

What markets are you looking at for STRs?

Please share your thoughts or experiences... 

It has been 6 months or so, and I want to get them on a lease, and adjust the rent for market conditions.They currently pay $1,500/month, market for this small house is $2,200 or more

The short term rental market in our area has been doing really well over the past year and we feel this property is a destination unto itself.