Why is accepted the keys and the deposit a bad approach?

If someone is below 600 but everything else measures up we'll offer a contract with an increased security deposit.

This is typically a 30 or 60 day notice.You will need to communicate and coordinate with them for all documentation, leases, SECURITY DEPOSITS, etc. 

The disclosure from the seller says there are no security deposits but one tenant claims she paid one and has proof of it.

We use Quickbooks Online which is pricier at $50+/month but is scalable and allows us to direct deposit contractors, send bills, etc.

We take a $200 pet deposit and charge $25/mo per pet.

Examples: I take a refundable pet deposit instead of a non-refundable one or a monthly fee, I currently pay the whole water bill without taking money from tenants because the duplex is watered together (I will eventually get a separate meter but the outlay is more than I want to pay right now) assuming it doesn't get out of control, paid for the new doorknobs on the bedrooms because the tenants requested locks despite the lead tenant saying they would pay for it, planning to replace the microwave hood simply because it's louder than it should be though it still works, etc.I'm probably losing out on a minimum of $100 monthly.

The Purchaser will be entitled to a refund of earnest money only if the Purchaser obtains an independent lead-based paint inspection or risk assessment performed by a Certified Lead-Based Paint Inspector or Risk Assessor, and the Purchaser provides HUD with a copy of the inspection report.This seems to me like if we got this LBP inspection done and there is LBP in the home, we can at least walk and get our $1k earnest money deposit back.  

@Jacob PhillipsAt a minimum (beside from your security deposit), you should have cash on hand to replace one of the major mechanical equipment (often the AC/Heater units).   

We lost part of our deposit because we cannot prove sellers know the foundation issue.We found we were fooled by our agent.