I will rather go for an yearly lease with rent increase according to market conditions, which can be more than 5%.

Maybe you could get the properties under conditional contract with a due diligence period.  

I like your tip on the 30.00 guesstimate to work in a high low cushion depending upon property condition.  

My partner has a second hand furnace that is in very good condition, 12 years old. 

@Eric Greenberg What exactly was the fine for (location of the fence, height, condition, etc.)? 

There is a loan contingency in the contract if the loan does not go through, though its currently conditionally approved. 

After this replacement, they will both be in good condition.

Besides the condition of the property and possible repairs, what else do I need to know to analyze a property properly?

But as others pointed out, you can hire a PM/Realtor to just lease the property and you can do the day to day yourselfAs a new landlord under no conditions should you self manage a C class property.

Originally I put about 40K in to the property for HVAC and a complete remodel as it was in poor condition.