Normally we keep 20-30k.So, how old is the water heater?

For non-primary residences, they have to follow all of the following rules to receive a permit: - the property must be a minimum of one (1) acre in size (designed as a precaution to disturbances)- The building standards of the underlying zone district must be met - Adequate parking is provided - Defensible Space requirements are met - Valid water and sanitation must be demonstrated - No more than five (5) bedrooms are in the dwelling As time goes on, they continue to become more strict on the rules listed above here, and are actively regulating it.

But, if you pay utilities, it might make sense to add a bit for the extra water / electricity.Personally, I would use this as an opportunity to tear up that 3 year lease. 

Can't include furnace, hot water tank, central ac and some other built-in appliances - check your local ordinances.

When there's tenants already occupying the property, there's often times different leases that were signed among the tenants.Additionally, renting by room usually sees higher tenant turnover which in turn causes more work for the PM.Other challenges to consider:- Disputes/conflicts among tenants (different personalities if a tenant doesn't know the others prior)- Occupancy limits- Splitting utilities (what if someone uses more water?)

Get the easy stuff first - rent roll and lease end dates, any bills the landlord pays - common area maintenance, maybe water, sewer, taxes, and insurance.

Purchase price: $242,500 Cash invested: $49,000 This is an older house, built well on concrete block, that is next door to multi-million dollar houses on the water.

However, upon finally gaining access to the home it appeared that the water was running from every faucet in the house.

Water heater 12 years to replacement (may need some service before replacement).Recognize many cap ex items are years away.  

The main issue with rental basement is water if it has water issue usually it is a simple fix .Clean gutters ,discharge gutter  water away 10" away from foundation, make sure you foundation soil is slopped away from it .If you need to buy soil get a clay mix .Cut back any tree too close to the foundation look at the drip line that's how far the limbs are out from the tree .If all that is done still has water buy a sump pump  carry the water to day light away from foundation 10" to 15" .