That can too quickly be eaten up by unforeseen items.

That being said, I would expect an itemized receipt that breaks down, what had to be done. 

Make it a top line item.

During the course of the project he recommended a few extra items he could do for a fee, like mowing the overgrown lawn, adding new stairs to the back porch, removing the skirtings around the house and adding new ones, etc etc.

But, if they did not want you do do that, you could create an addendum to their original lease modifying mutually agreed terms.Regarding the resident's items, you open yourself up to large liability if you give permission for anyone to touch or move the items. 

How many items of disrepair would need to be covered to make the cost of the warranty worth it?

We'll want to discuss any projects you've done in the past, what you'll have into the project, the scope of work, the contractor, and other items, but we love this type of project...and we're close by.

Original basis less depreciation plus cap ex items equals new basis. 

However, if you’re asking for a detailed line-item breakdown, some contractors may charge a small fee, which is usually credited back if you move forward with them.A good estimate should include:Scope of work (what’s included vs. not included)Materials (whether they’re supplying builder-grade, mid-range, or custom finishes)Labor costsTimeline for completionPermits/inspections (if required)Payment scheduleWhen reviewing estimates, it’s important to make sure you’re comparing “apples to apples.”

You do not get new depreciation for the loan you've taken out, so be careful that you are not going to be taxed on income you are not physically seeing.Another item, If you cash out to purchase another property you must follow what is called the Tracing rules.