This should have been pre-screened out before they even knew your contact info. 1st 2 questions that must be answered in the for rent posting before they get a response from me:  How much do you smoke?   

anything you add (new handrail, lighting) needs to meet new code.with safety issues like the basement stair treads, you might keep the basement off-limits (move laundry to main floor maybe).before renting, check with your city/county for rules for rentals - they may require smoke detectors installed (one in each bedroom near door, one outside each sleeping area, one on each floor level).FYI, during a remodel, if you install/update your Mechanical, Electrical or Plumbing systems, you may need to update that system in the whole house.

Smoke damage from what appeared to be either a squatter or previous owner before they lost the house.

Just to mention a few question that will smoke out the Seller's motivationsAs an agent you will have an "inside track" and be able to communicate with agents and learn how to better understand the culture of this business.When making offers to purchase properties, listed or not this is the clause I use "It is understood that the buyer is a licensed real estate agent/broker in the Maryland and that the buyers does not represent the seller in anyway by listing, verbal or written agreement, the buyer is entering this contract for the purpose of earning a profit."

For example, is adding a smoke alarm so you can legally rent it 'securing' or 'improving'? 

I know a guy if you need someone.You'll send in the form, the money, the inspection passed sheet, and also I think forms you sign saying you have carbon monoxide/smoke detectors.Be sure you read the instructions thoroughly on the form! 

On the front page of the lease I list in large letters my rules of no smoking, no pets and no day care of other peoples children.

No bedroom door, no smoke detector, few other tricks can make it happen.

After I had a good estimate I added 15% on top of my number which came out to be right around 4,000 since I knew I would miss something and that is what helped me decide if I was going to close on the property or walk away.I did not do anything to the plumbing however some of the electrical I had to rerun lines and also had to hard wire the smoke detectors in the basement and second floor because of a Baltimore County law.

That is all-in at 63% which is a smoking deal in this market, but difficult to come by.I have another going read this thread http://www.biggerpockets.com/forums/223/topics/73810 that I am all-in for $1.3M with an exit of $2.3M (will list at $2.5M) That is all-in at 56% which I would consider a homerun (if I hit my numbers, a grandslam deal)