I agree with 737blues - I think it should have nylon strings as well. What is the action like? How high are the strings off of the 12th fret? And if they're relatively high, how high is the saddle above the slot that it sits in? Generally the problem with an older guitar like this is that the action has become too high. It can be lowered easily by adjusting the saddle height but there's usually not a lot of adjustent room there. Nylon string guitars tend not to have a truss rod in their neck so further neck adjustments are difficult.
Looks like a really fun guitar - I love the pick guard.
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