If we tell them "use your best judgement" or "when extreme conditions are present" they always seem to go overkill.

It's dependent on the condition of the property.

background - after almost a month of rain, original wood floors in SFH started to buckle due to moisture and poor condition of subfloors (pier and beam foundation). 

I am not sure what conditions make that a requirement.

what does it take to rehab the other house to rentable condition? 

It just depends on the current quality/condition and expected future life of the carpet.

High price, normally not great condition, and rents so so low compared to purchase price....like $1000-$1200/side on $400,000+ purchase price. 

Remodeled the kitchen, bath, and conditioned the attic to living space before moving out and renting.

It can be a little awkward if the tenant is there or if the place isn't in perfect condition, but my feeling is that its more important to get the unit re-rented ASAP than to make everyone feel 100% comfortable.

During your walk through of the property you should be able to get an idea of the tenant based on the condition of each apartment, dirty, damages, etc.At the end of the day it can be challenging choice to make on keeping the current vs not.