The fire incident report says that it was oil at the stove that started the fire and added "alcohol / drugs" as a human factor.

I get that we all have budgets and that certain neighborhoods get certain treatment.

You'll also have to recapture depreciation.Another option would be to sell it and 1031 into a passive cash producing asset with a long lease life - a NNN property or a fractional opportunity that still qualifies for 1031 treatment. 

What is your specific concern: the smell will bother other tenants (if multis) or that it could turn into some sort of drug lab?

. ;-)One I remember was a drug house.

Just today we had two women at a store that know her well tell us how their school tried to get them to drug their daughters because they talk too much.

A month into ownership, a few neighbors started complaining about the neighbor from one of the units, that he makes loud noises at night, might be doing drugs and that most of the time, someone potentially known to him, stays in one of 2 basements of the building at night.

@Mohamed Nagoor , There is no capital gain treatment for flipping the house.

If the rental is treated as a separate property from the primary residence, would the tax treatment be different than previously described?

Is it common to see cess pools out there still and are there any companies that have alternative treatment units in the area?