In Cincinnati, it is common to have heat and water paid by LL in older properties, since it is one gas meter feeding a single boiler to heat the radiators in the various units.That being said, you are generally talking about expense conscious tenants in that C-ish range. 

Do you have a furnace (with duct work) or do you have a boiler (baseboard or radiators), If you have a Furnace adding AC is rather inexpensive).If you have a boiler (which it sounds like you do since you said wall hung unit) you can look into zoning the system, If its not feasible (which it may not be) you can also look into restricting the flow to some areas to balance the systems better. 

Yes I would grind off the black layer of the pipe.I have also heard of people putting a radiator type device over the top of a heat pump to capture the heat exhaust when the heat pump is in a cooling cycle.

I have a property under contract that I am penciling out my thoughts for the SOW before I bring over contractors and I originally thought I would have to remove it and install a new ac/furnace but my interior designer...

The negative, I assume, is that the cost to the tenant might be high and they would have trouble paying the rent.TL;DR: What are the pros and cons of hydronic baseboard versus a boiler and radiators that would heat the entire house?

There is also only a thermostat in the downstairs unit to control the heat with the radiators in the house.

There is also only a thermostat in the downstairs unit to control the heat with the radiators in the house.

Now i have seen the typical radiators used with steam heat but these radiators are recessed into the wall, basically flush with the wall.

I can't find a lot of good info about them online but I'm interested in learning more.The rental unit's heat is from hot water running through radiators, it's hydronic.

there is already a window in place and heating radiator (same setup as the apartment above just no wall)!