Another consideration is a vacant/burned-out lot next to your house will not be advantageous.

The price I negotiated takes those renovations into consideration.

The only thing I am unsure of, and you want to consult your CPA or whomever it may be, if you can write off the remaining balance when you sell or 1031 in 2-5 yrs like you mentioned.For me, my strategy is long term and I have extra cash on hand, so I personally always take into consideration of buying down points.

@Jo-Ann LapinThe main reason for the recent rise in rents and home values is a migration of the lower and middle class from the Bay Area. 

We touched bases with her three months after closing and she informed us that her unit was rented 27 days per month since closing.There are other things to take into consideration as well.  

After after the renovation of the foreclosure (and a new school walking distances from the house) and getting the quick sale purchase up to date we got instant equity, not to mention the rising prices of homes in the area.

With the current state of the economy and interest rates rising, I am not sure what to do.

You should also have esstopal letters for each tenant to confirm all details of rental amount, date rent paid, special considerations, DD and/or LMR deposits.The primary issue you should discuss with inherited tenants is that rent in full must always be paid on time.

No consideration of risk seems to be mentioned, ever, anywhere. 

Fallacious assumption is pricing is linear AND has no consideration for amenities or local conditions.