We decided not to renew because we had not done the screening piece and there was going to be a major increase in the rent.

It increased so much in value already. 

I too am appalled at the increasing inability to get a second chance in the USA, a country founded,  developed and built on second chances. 

Firstly, the basement walls' color was black / dark gray and we discussed on the phone that they will use some neutral color for it.

As demand for space in the market drives lease rates higher in older properties, it’s only a matter of time before those lease rates justify new construction and increase supply risk.

If it keeps happening they get a nice rent increase on the next lease renewal.I have installed Boiler Reset Controls on my properties to help a little with this issue. 

If you add a bath it may trigger to re-assess your property tax, and the increased amount may not be justified from your rent (especially if you own this property for a long time).

I want my PM to make a profit, but I want that profit to come out of the profit I get when they've increased my revenue and lowered my expenses and I want to understand exactly what I'm paying for, how much, and why.

Plus my income has increased 16% since that original approval.

Instead of trying to utilize the remaining $10k on acquisition of property #2, could we make $10k worth of repairs or upgrades to the first replacement property (roof, Kitchen etc) that would make it more attractive to a tenant and/or increase the value?