My husband and I are thinking whether we should fix up their old house to rent it out (the house is free and clear estimated around +$600k with market rents in the neighborhood of $2500/month), but it needs work (cracked walls, replace carpet, remodel kitchen/bathrooms). 

We just landed a 5 unit building for $110K, 4 of those units have been remodeled. a 3 BR unit needs small improvements.

I used to work for a remodeling company and we had done 1 house many years ago that had lead paint and needed to be scraped.

Turn off all water faucets, including toilets, and water heater in the house. 2.

,I've seen a lot of turds, and people purposely crapping in the toilet when the water is shut off so it smells.. but outside the house.. wow... just wow...the smear marks are the real gross factor...

My question is: what type of remodel will best fit this type of property?

You will need to hire a remediation company and during the remodel you will remove everything that is contaminated.

A turnkey provider and I were having a conversation about this last night but for a remodeled single family 2 bedroom home even in an area like hilltop in columbus they are getting $695 a month in rent. 

Another thing you can do is once you purchase you can let them know that you will be remodeling the unit when their lease is up and if they want to move sooner you will provide them with some cash to move quicker.

I usually bring in fluffy white towels, toilet paper and some throw rugs into my vacant apartments to make them photograph and show better.