Martin seems like you checked for some of the obvious causes already.

If they just cause a smell in the home then I am thinking an ozone machine once they move out and possibly replace carpets (which will need to be done anyway).

The soil here sucks - it's full of clay and the heat of summer really causes it to contract.

sure. but i will start another thread, cause i dont want to hijack this one. it's my first time evaluating a multi property, so that should be interesting..

I often see this made clear in the short sale package, and if you submit multiple offers to the bank, it will cause confusion and delay...

Interest caculated daily to an outstanding balance can cause different amounts, if interest is compounded and made a part of principal on a daily basis, your loan may not be in compliance for a residential property.Sounds you didn't get the type of loan you thought, I'd certainly investigate the note, your closing documents and especially the APR.

What if they have no money management skills, causing their bankruptcy?

I also ignored the fact that a students apartment with one bathroom might cause a lot of damage.

Look into time of the year as that can cause a 10%-20% change in rental values.

There is a higher likely hood to have a negative cash flow with a 15 yr mortgage which could cause you to lose the property.