Kyle, you are correct, you should not be responsible, but the fact is MN law requires you to pay unless you can show the bed bugs are a result of willful, malicious, or irresponsible conduct of the tenant or a person visiting the tenant, which is nearly impossible to prove. 

House hacking will also give you some personal "property management" experience.

Would our personal mortgages count against us for a cash out refinance?

STR you personally can enjoy the property too2.

And, if you find that person on the right day, you can make a deal that works for both.

Popcorn should always be tested before scraping.After pulling down the wallpaper in my daughter's room, I want to murder the person who invented it. 

If you're asking for free advice from a stranger on the internet, I'd encourage you to find a different STR market unless you want to have a place in Kissimmee for personal use.

Personally I feel he earned it that’s his money.

I personally wouldn't charge for any of that if they left the unit in good shape. 

This is a lender and personal question.Lenders look at your monthly Debt-to-Income Ratio.