I found a big lot in Splendora Texas. but the owner tells me I can't develop it because it is in the floodplain.

One day it may finally catch and it will be a big windfall for some long time owners I'm sure, but its more likely you get in and out when it doesn't redevelop. 

Long story short, we decided we want to manage it ourselves after they started the “advertising for the property.”

@Bruce Woodruff had a dog house, I had a cat house...27 cats, the owner walked away to another house up the street, leaving dishes on the kitchen table and all furniture.

Owner-Occupied Property in Texas: Will I need a property management license if I owner-occupy the property in San Antonio, Texas?

Here are some things to consider when deciding whether to lower the rent: Evaluate Market Demand,Assess Feedback, Be Flexible, Remember, finding the right balance between maximizing rental income and minimizing vacancy is key to successful property management.

I decided this because fair market value for rent on the entire house is roughly $3,000, which would make his portion of the "rent", $1500.

If a home owner's appliances broke, they'd deal with it. 

While I’d prefer a long term renewal, I wondered how you typically determine a month-to-month rate if the tenant decides to go that route? 

@Tyreek King-El while there is nothing wrong with you deciding to DIY manage, what's in all this for the PMC?