The inspection is an opportunity to (a) document the condition of the rental so I can track tenant damages from that day forward, (b) look into any maintenance issues the tenants may be concerned with, and (c) notify them that a new lease is coming and what that entails.As for rent increases, I don't ever recommend keeping tenants more than 10% below market.

This only works in very specific / certain conditions, and it still has lots of risk. 

             - The properties are in C to D condition with an occasional B- condition. 

However, I recently moved back down because I cannot handle the cold weather. 

Now a landlord (and architect), I wouldn't build out the space without the second stair since it really is a safety issue/liability (especially in case of a fire) if anything were to happen.Full excerpt of building code below:According to the Chicago building code on egress requirements, the third story above grade plane within a dwelling unit [which in this case is the duplex-up unit], all the following conditions must be met:1.) the building is equipped throughout with an automatic sprinkler system2.) the floor area of the story does not exceed 1600 sq ft3.) the dwelling unit has an exit that discharges directly to the exterior at the level of exit discharge.Your third story attic space is unlikely to exceed 1600 sq ft, but you'll probably find the sprinkler system to be cost-prohibitive.

I'm simply offering an alternative viewpoint based on the current market conditions and the heightened competition.It's easy to tell people to put sticky notes on someone's door, but what is the true cost and benefit? 

Quote from @Jay Thomas: It's critical to take into account the current market conditions and financial viability when deciding whether or not to invest in a real estate property.

The greater ability to repay, the greater chance of qualifying. 12-24-36 months of reserves are a common underwriting condition. - Two appraisals.

-How bad is the weather?

There were young guys in peak physical condition that would melt like chocolate in Death Valley the minute bullets start to fly.