But, it looks like the HVAC system is very old and will need to be replaced within the next year or so.

I believe to get it rent ready (next summer) I would need about 14-16k more and then if I factor in AC/Furnace we're creeping into the 20k range (house has asbestos siding panels and the broken ones need replaced and then get the house repainted 6kish or I have it covered with vinyl which kills two birds but probably 2-3k more at 9k).

But please don't forget that you need to set aside money for rehabs and other funds in case something needs replacing like a furnace, hot water heater etc.

We are replacing the roof and turning the grandmothers addition into an ADU.

We are replacing the roof and turning the grandmothers addition into an ADU.

I don’t know if you’d want to do a full rehab, but definitely fresh paint, repair any obvious things, carpet cleaning if that will suffice, or replace, clean outside…make it suitable for occupancy. 

Bubbling of paint and drops along the windowsill.Is this something I can seal or do I need to replace windows?

Will this be considered a repair (as I didn’t replace all windows, only ones that didn’t function) or improvement?

After all, even $150 savings per month is equivalent to the cash flow from a single rental unit.One thought that crosses my mind is that I probably wouldn't make insurance claims on small things like appliance replacements, since it will increase the policy premium(?) 

I’ve got a tenant who wants to end her lease early and she found a new couple to replace her so I have agreed to this pending their approval of my screening process.