There may be cool air seeping in from the outside reaching one side of the wall and the warm interior air on the interior side of the wall resulting in condensate. 

How long as it been on air bnb?

If you have a larger system with a hot water circulation system, it may be air trapped in the lines.

End state is have top floor rented,  bottom renovated and  plan on using 1 to 2 of extra bedrooms (it is 4/2 downstairs  as  an Air BNB,  and a possible third revenue stream by renting out detached garage .  

If you have the ability, maybe consider renting out a room in your home on Air b&b or as a monthly rental - also gives you the flexibility to get rid of people easier.I recently read a blog post here on BP by a guy who had set up a curtain and was sleeping in the living room while renting out his original bedroom.

When a property built in 1988 has the original air condition condenser, it is a safe assumption that the cap ex will be cashed in sooner rather than later.  

In my personal opinion I do not believe that someone would cut costs and want to rehab this place to bandaid the problem of leaks on the took which goes down into the walls and light fixtures, plus an unfished bathroom-like area that's exposed sewer drain and plumbing, someone couldn't just temp fix it to make it livable because I believe its unsafe the air quality is bad when the furnace kicks on it sets off smoke alarms so they leave it off.....

Eachtype can generate investment returns in different ways like, capitalgains from a fix & flip, appreciation, rentals, and Air bnb toname a few.

In your climate you preferably want R15-R30 insulation to keep hot air in during the winter, and cold air in during the summer.

You don't keep tires on cars that are leaking air do you?