From what can be seen it appears not to have been loved, so one can infer deferred or improper maintenance. I would think that for under $2000 you can get a much better one that might save you the difference in repairs. It doesn’t look rusty, but good to check or have someone local check it out for rust, rodents, mold, and collision damage that might affect body alignment and other things that could put the repair costs beyond what it ever would be worth. Exhaust smoke could mean anything from almost nothing to worn out rings or bad head gasket, assume the worst.
In general Volvos of that vintage were fairly robust, but the turbo might be a problem - a coworker had one on either a 740 or 940 which required replacement twice, rather pricy at the dealership - you might check Consumer Reports for that year. We owned one each of early 90’s 740 and 940 non-turbos that were going strong past 220kmi with little unscheduled maintenance (mainly radiators, which were easy).
Our local independent Volvo service told us that catalytic converters tend to fail around 200kmi, that they no longer are available from Volvo and that after market replacements have short life, a year or two, so you might want to factor that in (ours were still working but getting weak). Another common problem was traces on the AC controller PC board burning out. New boards are pricy, if you can find one, but they can be fixed by replacing the blown traces with wire. If the AC uses Freon 12 and needs recharging, be prepared to convert to the Freon 134a (this might or might not be too involved providing the old fittings aren’t corroded, and if doesn’t require a different compressor). Ours had non-interfering engines (I don’t know about the turbo) - if the interfering type, replace it right away (ours were easy, do the water pump while it’s open, too.).
In CA we still see a number of these on the road, but I’d be inclined to look for a “cleaner” one, maybe from CA or someplace where less salt is used.