This was very depressing because my wife and I would really like my room for the kids to play, to grow food, have more room for our chickens, and I also keep honey bees.

The sellers have agreed to give credit for half of the safety &  health related issues/repairs but only wants to cover the septic replacement with an escrow account as they're hoping that we'll handle the replacement, get reimbursed by the Department of Environmental Conservation/ Catskill Watershed Corporation (CWC) and refill the escrow to reimburse the sellers.

Particularly if they pose a safety or health threat to other tenants or neighbors.This doesn’t need to be (and shouldn’t become) a big issue; but proceeded with the knowledge that you have a few options and are within rights.

lol   Definitely opt for the multiple bathrooms, have specified food areas, NO PETS, month-to-month leases, no couples, no drama-- and absolutely hire a cleaner every week or two.

As stated earlier, leverage allows you to obtain more safety in numbers with multiple properties, it also allows you to expand your portfolio much quicker.

The typically volatile food and energy categories played a significant role in February, as energy prices rose 3.9% (led by a 6.4% jump in the gasoline) and food prices increased 0.2%.

However, if it has to do with the health and the safety of the tenant or property, then you'll have to respond. 

Based on estimation, they would have ~700/month leftover for food, gas, car, etcCurrent rent 1600 (includes utilities)

(An experiment, like people spending $10 on food per day).

Deliver Food (Be Aware Of Allergies)The quickest way to your neighbor’s heart just might be through their stomach – remember to consider common food allergies (like nuts) when making your food choice.