Or, to give yourself some wiggle room on the turnaround time for renovations, a longer term at a lower interest rate but with a pre-payment penalty that decreases each year.

They may like the idea of decreasing their tax burden and receiving some passive income via interest. 

Done right that should decrease your living expenses and allow you to save more quickly for your next place. 

As we move into winter there has been an uptick in foreclosures but there has also been a decrease in overall supply so I've yet to see a loosening of the market for investors.

If you buy in a location where prices and rents are increasing below the inflation rate, your only option will be to decrease your standard of living over time.

If you can qualify comfortably and are willing to take the risk, then jump.Another option is to get into contract to purchase the new house, close and then sell the existing one which mitigates (reduces) the risk of owning two properties in a market that may decrease in value.

Even the decrease in 10% rent can have adverse effect on cashflow.I am also open to do a cosmetic repair where I can improve some of the stuff to compete with newer homes in the area (say granite countertops and stainless steel newer appliances).

As the supply of buildable land decreases in many markets, it pushes up the value of existing homes.

It is more likely to increase than to decrease.

When I pay in November, I would credit cash (decrease an asset) for the first 10 months of taxes and debit property tax payable (decrease a liability) for the full amount (10 months).