She gets to move, I don't lose out on rent.But she don't want to let people in the house for that also.She has damaged the floors (last year) which is a $900 repair.

Tenant likely uses stairs just as much.A few of these stairs have some damage to 'treads' - few hours and some patch needed. 

But what long term effect does this have for banks and then those that have to report earnings with more and more dead beat properties on their books?

If so you can then take them to court for additional damage costs instead of rent assuming your state legislation allowse deposits to cover rent.

Currently, I have a full time job in the fenestration business, and I was legitimately curious if the whole concept of "indoor/outdoor living" had a major effect on home values. 

The property had significant damage and required everything including flooring, roofing, HVAC, total rewire, joist work and more.

I just had a pipe burst but the damage was isolated to beneath the house.

That way, we are all on the same page and they are both responsible for rent and damages, etc.

I mean damage is already done.

@Theodor Morgan, buying a multi-family is a very common (and effective) strategy that many new homeowners/investors have employed.Run the property through the BP Calculators to find out how good a deal it is.