If things "unexpectedly go wrong" I just have less cash-flow that year rather than ending up losing money.  

Thank you for reaching out, lets get to work!

I am not one to throw anyone under the bus, but I am constantly cleaning up messes after a unexpecting investor gets screwed by an over-priced, under-rehabbed, badly tenanted, and poorly managed investment property.Buyer beware.

if the tenant was crooked, a professional tenant who was out to cheat you, it would happen regardless of what you did.Now, for most decent folk -regardless of socioeconomic class, unexpected kindness or gift is almost always appreciated.My experience is that the more the owner/landlord appears to be "human" rather than a large corporation, the more likely the tenant is likely to treat the property well and even fix problems on their own. 

You should save up until you have $3000-5000 to pay for unexpected expenses, like broken appliances, leaking roofs, and prolonged vancancies.  

Of note was that the report indicated that "[s]everal outlets are not properly secured to wall and some outlets do not function properly.

Unexpected expenses will occur.

Moreover, insurance only protects against accidents, an AP Company protects against other claims such as breach of contract, gross negligence, fraud, etc.Fact is that getting sued is like a flood, it is unexpected and it may not happen to you.

This may end up limiting you to sitting uncomfortably and unnaturally close to a low-placed (or high-placed) power outlet.

The repair work is not easy on a 100 year old property with lots of 'deferred maintenance' or shoddy prior work - look for electrical problems - faulty outlets, lights improperly installed, knob and tube wiring spliced into romex wiring spliced into BX cable; plumbing problems - lead pipes, galvanized pipes, PVC pipes, leaks, water damage evident in the plaster ceilings and in the flooring; old roofs with multiple patches and multiples layers of shingles with steep pitches; bad siding or asbestos siding that is old and needs to be replaced; absence of storm windows; old windows that don't open/close smoothly and may break; lack of insulation causing high heating bills; cracks in the foundation - cracks in the old plaster - costly to fix; do not be misled by the low entry price - I would focus more on the drive out price - do you want a rehabbed property and if so, what is that going to cost you [could be $30-$50k] or do you want to be a 'slum lord,' i.e., do minimal repairs and have a crappy property that leaks and will never be clean and chase tenants for rent.