They both have "regular" jobs in addition to this -- she sells houses, he fixes them.

I have received late charges in addition to monthly rental fees.

Additionally, there is no dryer vent so I will have to add one and it will have to vent up, which according to my handyman is not recommended.My question is -- does anyone have experience with ventless dryers?

Many great tenants would not even consider signing a 2-year lease, so you may be missing out of some of the market.From our rental criteria:FINANCIAL/CREDIT HISTORY1.No outstanding debt to previous rental property owners.2.No outstanding debt to utility companies.3.No outstanding debt in excess of $1000 that is not in a payment plan.4.No excessive monthly financial obligations - more than 20% of income.5.Lack of credit history or marginal credit history may result in additional security deposit. 6.Derogatory credit (past due accounts, collections, charge off accounts, tax liens, judgements in excess of $1000 and/or bankruptcy) may result in additional security deposit or denial.

Additionally, I learned that 90% of condo owners, in this building, actually are renting out their units.

Full search, perhaps additional risk premium.

I agreed to review existing report, in addition to getting my own inspection done by an inspector I trust.

Thus if it is one month's rent lease up fee, and you expect the property to turn every 3 years, then divide that amount into 36 months, and add it to your other expected costs. 

This conversion was done without proper permitting and approvals from the city and obviously the additional bedrooms are not showing in the county records.

In addition, if you chat with an attorney, you can start to get yourself familiar with the rental laws now, before you come upon a situation where you need to know where you legally stand and what your rights are as a landlord.