@Vemmanath VasudevanPicture a glass, 80% full of water.

Also, set a high water mark and do not ever ever ever cross it. 

I moved in and immediately replaced all of the carpet flooring in the house with engineered hardwood; I re-painted the entire interior; I replaced all kitchen appliances with new ones that I found at a discount at an outlet/scratch and dent; and replaced the water heater.

For example, often fire damage is water damage--they put the red stuff out with wet stuff.

We now have 3 tenants on a one year lease, paying 1300 total, and they pay all utilities except sewer and water (about $300 per quarter).

They aren't going to automatically remember to do things like pay the water bill, mow the lawn, not throw Q-tips down the toilet, etc.

Riskier than traditional-With the high interest rates and short terms, you could end up being under water if you do not manage your project correctly.

Make sure before you purchase the property that both homes have separate utility and water meters.

Mostly cosmetic fixes besides the AC, ducts, insulation, Aerator for well water and a big back patio of pavers.

Each year I'm replacing carpet, buying washers, replacing hot water tanks, repairing the porch, etc.