There are fundamentals that point towards more market appreciation in the long run, but in the short term, it's speculation. 

These steps are how speculators add value to existing property.

Based on this experience, apart from a couple of speculations in Florida and Las Vegas, all I now do are local (Marin area) rehabs and flips as these have proved to be the most dependable and lucrative sources of income. 

@Neil P. you should definitely consult your lawyer about this, but since you asked I will be happy to give my non-professional speculative 2 cents. if his original lease stated that it turns into a month to month agreement after the two year term then I would think all of the terms of the lease are still valid which includes first right of refusal.I don't understand why the seller didn't go to the tenant first and offer the property to the tenant at a certain price before listing it for sale.

Having said that,  I wouldn't leverage my primary residence to speculate on some rental properties although many do.It depends on the terms. 

At best you are speculating on appreciation.

If you have a decent W-2 to cover the loses, you may choose to bet on appreciation, but this is speculating and can bite you in the behind. 

Ongoing, I don’t anticipate this property being a high positive cash flowing property, I purchased on speculation of future developments.

When speculating on long-term passive property investments, one should consider taking into account the “1% rule”.

More importantly, a lot of those numbers would then be pure speculation.