The life estate document also usually prohibits the LE tenant from "wasting" the property or allowing it to deteriorate.

In balloon framing you close off the top and bottom of the walls.Actually, there has been a fair amount of research (visit the Building Sciences Corporation library for one source) demonstrating that moisture - from external water penetration or air leakage (or, form the interior if open cell foam is used -  can frequently permeate the roof deck causing deterioration (rotting) of the deck itself and/or mould growth.  

It has what appears to be asbestos siding - I am not under contract, and this has not been definitively tested.There appears to be a bit of cracking going on, as well as some deterioration where the siding meets the eaves and the roof.

The regulations provide a list of situations where the unit of property is restored, such as if the expenditure (a) returns a unit of property that deteriorated to a state of disrepair (and can no longer be used for its intended purpose) to its ordinarily efficient operating condition or (c) replaces a part or a combination of parts that comprise a major component or substantial structural part of a unit of propertyIf you had just patched the crack that would be repair.

It was usually used with non sanded grout which deteriorated over time.

Letting your properties deteriorate will result in lower tenant quality. 

Yes it is mostly from depreciation, but also as a result of repairs and maintenance eating up profit - which could be deferred but at the risk of deteriorating the properties.

I will fix some cosmetic issues if I feel that in the long run they will add to the value of my unit..... but that's it.Microwave..... probably gonna need to replace it pretty soon anyway.....so at best I would swap that..... it does add to the long term value of the unit.....I would tell them the unit is "as is", and I will gladly release them from the lease with no penalty....... otherwise unless its a safety, habitability issue or the issue will in the long run deteriorate my property, then NOPE....... especially not for a brand new tenant.

Return of Time deteriorates fast if you're taking longer than you should.

As you noted, rates are deteriorating and tomorrow's FED announcement will be big.