If the water drips in the window sill, the tenant may never notice there is a drip and the water could rot the wood there, not to mention drip into the wall and cause damage there and on down to the subfloor, etc.Regarding central AC creating happier tenants, I wasn't clear. 

Demand has totally dried up here and hotels and villas are listing for sale at much lower valuations. 

Even if the market value of my property goes down 50%, I'll still be making money.The lack of liquidity could also work in my favor during a downturn assuming I have dry powder available. 

With two shop vacs going, and and several industrial fans drying the ground, we were able to lower the water levels to fine puddles.

Once the stuff dries it's not volatile.

The price has dropped once already primarily due to some pretty substantial deferred maintenance that the seller doesn't want to deal with (new roof, retaining wall, some dry rot).Looking at COCROI/Cap Rate and other numbers, the place looks to cash flow handsomely already – around 1k/mo with existing tenants at existing rates.

NYC is saturated with investors and the market has dried out.

It will pay off in the long run as the initial cost of tile will be a fraction of what you'll pay a contractor to come in and replace rotted subfloor.

Water is corrosive, air can be too, paint will dry in there and be a nightmare.Just my .02

It is rot resistant here and maintenance free--perhaps the why and wherefore.I do not see much wrong with the place as is, but your market and overall design plan are key.