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Well, it is not entirely a dump, but close to it. You still have an outside dunny! The good features are the location (inner-city living), scope for (a whole lot of) improvement, and a reasonably-sized courtyard which looks to be north-east facing. (SOLD $780k)

On a minimal budget, the first thing to do would be to add a toilet to the bathroom. Then, I would knock out the wall separating the kitchen and the back hallway, to make that bigger so as to incorporate a dining table in the kitchen area. Then if there was a little more in the kitty, I would extend the back covered area out and make that another living area, blocking off the bathroom window (I would put a skylight window in the bathroom instead). I would also look to the attic to see if that can be cleaned and create a storage area for future use. Obviously the whole place would need to be fumigated, re-painted and new carpet installed.
For the living I would go with a clean, simple look with light pastel colours. 

I would also add a bookshelf to the hallway wall.

For the bedroom, keeping the clean lines look, I would paint the room a light grey, like below, and install curtains from the ceiling to floor.
In the new kitchen/dining area, I would strip all the cupboards out and buy some second-hand stainless-steel appliances, paint the walls black and add open shelving like the below.
The bathroom/laundry would finally include a toilet and likely it would need to be re-tiled so I would keep it simple, like below.
For the new larger back room, hopefully it could be extended just enough that it would become a multi-functional study/guest room with bi-fold glass doors that open out to the couryard.

Then with some TLC over a while, I would change the backyard to a clean and modern look.
All pictures pictures pinned here
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