Keep in mind, it's s security deposit, not the rent for the last month of the lease.

Bottom line is it's better to cut your losses and move on.You can deduct the cost for pest control from the security deposit because that is clearly damage caused by the tenant.

I kind of doubt they will be unable to secure insurance or financing, but it's definitely worth investigating the potential implications before laying cash on the table (or lock it in with a due diligence contingency for this matter). 

Annette in my opinion it boils down to security and risk and your comfort level in those two areas. 

I have to maintain security practices.  

I'm considering a rental agreement that states the move-out date in the contract (with option to extend under certain terms), and has them pay the full 2-3 months' rent up front, with a half-month security deposit also due prior to taking residence.

I am currently procesing an eviction for failiture to pay two months of rent, how ever this is an inherited tenant from when I purchased the property whom I dont have any social security or ID information of him just his name.

But anyway, should I charge them some small amount, maybe $200, our of the security deposit even though I was going to be replacing the carpet anyway after they moved out?

The idea is to use investor capital to secure rental units.

What kind of LOC is it (i.e. secured, unsecured) and do you know for sure it's legit?