However they have been completely repainted and there is no peeling paint so if it is present it is encapsulated, so that is a reasonable approach to protecting my tenants IMO.

Then I can repaint myself.

I would also repaint the whole thing and even installed a gravel driveway.

I'm assuming the interior walls need to be repainted anyway, so I'd paint the paneling the same color as the walls, as someone else said. 

That way they feel like they are getting their money's worth.Adding ceiling fans, repainting a room or two, changing the countertops in the kitchen, changing the sink in bathroom will make it harder for them to leave.Plus if they do decide to leave, you have already started the process to get the unit ready for the next tenant.  

Inside you would have walls racking and sheetrock would be damaged and when that happens the best may be to redo all the texture and then repaint.

My thinking with this is that this essentially gives the renter subconscious permission to let the dog to $500 worth of damage - "Fido's scratching up the back door, but that's OK because I've already paid $500 and it won't cost that much to repaint it."

If I needed to redo some of the flooring in the house, repaint, and update some of the fixtures, would you have any idea of how to go about estimating that kind of cost.

Everything seems in good shape from visual inspection, and the previous owner removed unsightly wood panneling, repainted, added new carpet and flooring and upgraded some plumbing.

The renovation included replacing all the windows, new central heat and air, replaced or refinished all the flooring, repainted everything, fixed lots of rotten wood and drywall and did a complete kitchen.