I plan on keeping the PM for a few months to help me get settled with new leases. 

The property prices are so expensive and rents there are not keeping up in order to cash flow.

The context is the tenant caused a lot of damage to the property and I am keeping all the security deposit towards repairs.

Honestly, it is overwhelming for me since the house wasn't in the best shape when we bought it and my family didn't keep up with repairs/renovating throughout the years.However, we do have around ~150k in equity which can be used for renovation and aftewards renting it out.

Its like its football and its 4th down and you need 1/2" for a first down, keep it simple and run it up the middle.

This translates into increased costs and risks for the owner-manager.That said, keep checking it out and underwriting the deal, it sounds like there is potential there. 

They had wanted me to drop the price by about $170 and after some back and forth they said they could not find a good comparable property to mine (fully  renovated) so they had let me keep the rent price and told me next year when it is time for increase I may not be able to raise much if any.

I got my first rental with negative cashflow last year.Property price 241k, loan balance 232k Tenant pays rent 1,800$monthly payment 2,050$Spent 5,000$ on improvements.Property appreciated from 241k to 255$ this year.I am not sure whether I should sell it this year or keep for appreciation purposes?

There are many details left out, but to keep it relatively concise that is the gist of the situation. 

In our lease agreement, tenant agrees to keep premise clean, safe and in a habitable condition.