A very high or punitive late fee is going to do nothing but dig the nonpaying tenant into a deeper hole that's harder to pay their way out of. 

The tenants moved in on Nov 26, 2010.To prepare the house to rent, we made several repairs, from filling in nail holes in the wall to getting a plumber to repair a sillcock outside.I know repairs made after the tenants moved in are deductible.Question 1 - if we made repairs before we moved out (Nov 18) to prepare the house to rent, are they deductible in any way?

Look for holes in the map and look to build or buy there. 

Storm sewers or surface drainage, storm ponds, internet, water ($150,000), sewer/Lift station?

You've given me my next rabbit hole of research to dive into! 

I don't care if I get holes in the walls.

Seattle has some pretty agressive drainage management requirements and other site prep requirements as well that probably aren't part of the standard spec house prices.Also I would be very surprised to find a $100K (full sized) buildable lot in seattle proper in a location that would be a good place to build a SFR. 

Thank you david for your insight Sorry to tell you this, but your "plan" isn't a plan...it's a concept that has too many holes in it as presented to be a plan that works.

The tenant has pointed out things like a window screen with a hole the size of a quarter and doors missing door stops...  

What if your no-pet renters put holes in your walls?