My husband and I are thinking whether we should fix up their old house to rent it out (the house is free and clear estimated around +$600k with market rents in the neighborhood of $2500/month), but it needs work (cracked walls, replace carpet, remodel kitchen/bathrooms). 

It needed new carpet and paint in one of the units.

See principal balance.remaining termThe original amortization term minus the number of payments that have been applied.rent loss insuranceInsurance that protects a landlord against loss of rent or rental value due to fire or other casualty that renders the leased premises unavailable for use and as a result of which the tenant is excused from paying rent.repayment planAn arrangement made to repay delinquent installments or advances.replacement reserve fundA fund set aside for replacement of common property in a condominium, PUD, or cooperative project -- particularly that which has a short life expectancy, such as carpeting, furniture, etc.revolving debtA credit arrangement, such as a credit card, that allows a customer to borrow against a preapproved line of credit when purchasing goods and services.

New appliances, paint, a few rooms need new carpet.

The PM acquisition specialist used her contractors to do a mild rehab; new granite and some new carpet.

Should I do carpet, laminate or vinyl flooring?

This means that landlords can now use Section 179 to deduct the cost of personal property items they purchase for use inside rental units—for example, kitchen appliances, carpets, drapes, or blinds.

Smell is gone without replacing carpets or repainting.

There was food on plates left around the living room, fly strips hanging from the kitchen light, fruit snacks on the carpet, and the toilets/showers looked like they had not been cleaned in 6+ months. 

Roof is original (Shingle) $4k is as I expect to have to put in about $1k each unit in some shape as carpet, paint etc?