Brook,You have some options based on what you have described:1.

I would also describe the neighborhood and maybe put a more set back house picture.  ...Quiet street, also it is a small point but "we love to travel so we furnished our home with travelers in mind" might be rephrased as  Furnished with everything the busy traveler might need including xyz.

What I am describing is a PUD can be a huge landscape of property types.   

@Mitchell Brown  I don't see any pitfalls with the approach you've described, but I recommend you have an attorney create the LLC documents and your operating / business transfer agreement. 

Anyway, the LLC would have to take Title upfront in your described situation. 

(This one we like to elaborate on by inviting people safely into describing what they aren’t inclined toward such as long team meetings,etc).

What you're describing is not typical - sounds like someone trying to take advantage.If this is your first property, and it's distressed/in need of repair, I suggest obtaining an FHA mortgage with a 203(k) rehab loan. 

It describes starting small buying multifamily property then selling after a few years, doing a 1031 exchange to buy a larger one...and repeat the cycle.

If they just won’t budge, you or the tenant will be stuck paying up - it is basically impossible to “win” and argument against a dug-in public utility (for some pretty amazing examples, search for various outrageous water utilities threads in the Atlanta area of this forum). in any event, to answer the OP’s initial question, if this were my tenants and they were as high quality as described, I would very likely make up the difference (or, at the very least split the difference) for them.  

I recommend using the process described in the book Topgrading. this is the process that Chick-fil-A uses to find their managers and franchise operators.