Its my understanding that things like paint and carpet are not normally something you can take out of a tenant's security deposit, but I've read some comments online that suggested if they require change/updating due to smoking in the unit it's acceptable to withhold the funds.I don't have any experience with returning security deposits so I figured I'd take to the forums for some advice.

I started out doing that, in partnership with two friends, a painting contractor and a plumbing contractor, and we owned 12 doors by the time we were 30.

Many of these homes were foreclosed on during the housing crisis.These investors, however, often put no money toward renovation, or for fixing lead paint problems.

Or paint a wall, begin hording, add a electric space heater or start growing pot...not long.I tell my tenants it is for their benefit and safety for me to inspect furnace filters, smoke alarms, CO2 alarms etc.I personal am more concerned about my property investment than the minor feelings of tenants.

If you were investing 45K and obtaining a mortgage for the balance of say a 60-90k range you could obtain a nice single family that may need major/minor cosmetic work, like painting, removing old carpet, yard sprucing.

HI BP, My partner is looking to purchase a home and the contract includes a risk assessment contingency shown here http://i.imgur.com/y6Inpo8.png  "Contract of sale is contingent upon risk assessment or inspection by purchaser for presence of lead based paint/and lead based paint hazards" along with a disclosure stating no knowledge of lead based paint. 

If you wanted to do paint and carpet beyond that, up to you, would be more.

Some tenants are tempted to use the basement bonus room as a bedroom (dry, painted concrete walls and floor); yet it does not have proper egress windows or a closet, so we let them know it is not to be used as a bedroom.

FRP panels for walls in wet rooms, VCT for wet room floors, 1x4 screwed horizontally to studs & towel bar mounted to that, *no* soap dishes in showers, high gloss white paint for trim, *no* carpet, 

[The bank is offering a 5 year fixed ARM with balloon, on a 15 year amortization, 4.9%and we've talked the owner into a 15 year am with a balloon payment in 5 years on the 90k, 4%.]With our low DP and bank terms amortized on the 15 year note, we are only projecting a cash flow of about $470 or if we can talk the owner into a 30 year amortization to base the monthly payment off of then it would be around $710.14 units would be under our care, some with some deferred maintenance (exterior painting and leaking roofs), and one shop building.