Diversity of renters, length of leases in place, property condition, and location can also affect risk and value, ultimately impacting the cap rate.When someone says a property has a cap rate of 5%, or that assets in a given area are trading around a 5-cap, they are talking about the return on that property.

This could probably be lower if all items are in near new condition, but I have had $6k in gas line repairs for gas that couldn't be smelled, but the utility transfer caused a pressure test that found multiple leaks throughout the system.  

Rental properties in ready-to-rent condition, or even with minor rehab work, can't even cover financing costs much less maintenance and management expenses.

My 2 cents would say that it probably can't be insured in it's current condition.  

They should also be performing a thorough move-out inspection and even a mid lease inspection so you can see the condition of your property.

Capex will be contingent on condition of property and how long you plan to own.  

It's in a nice area and will prob sell high even in this condition.

Most systems don't deliver the efficiency that they claim because the test conditions are so different from installed conditions (SEER will be replaced with SEER2 that uses more realistic tests) and most systems are oversized.

Not that my opinion matters, but I believe rehabbing old homes to the condition they used to be in while adding modern fixtures so that families can live in them is worth doing. 

We would greatly appreciate any input from the community regarding current market conditions, potential for income, and ultimately, whether this sounds like a good deal or a bad deal.