@Holly85 , no, you didn't overreact - don't second guess yourself! Their stay is almost over, and I think it's wise to just let it run out. But looking into the future, this encounter is an opportunity to figure out what you need to do to prevent any such thing from happening again.
Looking at your listing, I immediately I see that you practically promise the run of the house, no wonder they liked that for only $40 a night! New hosts such as yourself often try to be overaccommodating, letting the guests have access to everything, don't do that! It's the other way around: underpromise and overdeliver, that is what gets you appreciation and great reviews.
So , best is to change the description of your listing asap and clearly define the limits:
1.) Your listing is called "Holly's House": that already sets the tone for expectations. Perhaps call it "Peaceful room at Holly's House", or whatever....
2.) It is listed as one private room, yet in the description you say that guests are also welcome to the shared living space, the kitchen, to everything! That is where you are inviting guests to take over. Think it through carefully - and limit that! What a nightmare it would be if guest stay for a whole week, start cooking, etc.. Perhaps just offer the outside patio as the shared area. That patio is a a lovely area, also has a great picture, very inviting.
3. Once you make those changes, also rearrange your pictures: show the house, then guest space, such as their bedroom and bath (maybe take a few better pictures, brighten up that space a bit), then the patio. I would drop the kitchen pictures all together (again, you're setting yourself up for wrong expectations), and at most one picture of the living room. If you get along with guests, you can always offer use of all these extra spaces when they are there - makes for a nice surprise and appreciation.
4. Good luck and happy hosting to you! PS: I lived many many years in Ocala, in the old part of town, on SE 7th street 🙂
