In some cases a great tenant is priceless, so I would try and work with improvements that you can do to improve the property but within his range to pay for the rent upgrades.

The foundation and space is great but the house and yard need upgrading to maximize rental income.

I wouldn't want to put tenants in without have all the systems upgraded.

The place is similar to our own (same builder, similar layout etc.)If we purchase, the home would need some serious upgrades that will take time.OPTION 1:  Move into new place, rent out of current home.We are comfortable moving into the new place, renting out our own home. 

Any upgrades worth looking at?

I've seen homes 100+ years old that are in excellent shape because they've been well maintained, renovated, and upgraded.

Also, the old tenants destoyed their units.This though provided great leverage to me to get almost $30,000 worth of free upgrades and renovations on the property!

This building is 100 year old and don’t think any upgrades are done on plumbing and electric.

Gas also reduces the necessary load on your electric panel; I've been able to avoid having to upgrade a few panels on houses by incorporating gas water heaters and gas furnaces.

I tell them that we're going to being making these upgrades and will be an attentive landlord.