Author Topic: Where to put rehab money  (Read 1583 times)

dantownehall

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Where to put rehab money
« on: May 12, 2014, 01:37:30 PM »
Hi all,

I've been thinking about rental properties recently, and I was hoping to glean a bit of knowledge from the members here.

I was wondering what all you look for in a house you want to rent.  Not financials, that's all been pretty well covered here, but what you look for in the house itself, specifically in regard to what refurbishments are the best bang for your buck when it comes to attracting people who will pay more.

My idea would be to buy a cheapish, outdated place in a goodish neighborhood, and do more or less just cosmetic things to fix it up.  I would be looking for a structurally sound house that's just ugly inside.  I'm pretty handy, and like all mustachians have impeccable taste of course so...

I'm thinking things like:
   -take down wallpaper, paint the walls a nice neutral color
   -take out old carpet, replace with nicelooking wood laminate
   -newer appliances
   -make the kitchen look bright and inviting

I think there are plenty of old, tired looking houses in my area (I've been in a lot of them!) that a little work could spruce up and attract good tenants.

Anyone have any experience with these sorts of renovations?  What renovations are most important?

Fishingmn

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Re: Where to put rehab money
« Reply #1 on: May 14, 2014, 12:08:41 PM »
I'd try to match the level of updates to the neighborhood and competing rentals. Therefore, it would depend on the type of property and what the expectations would be of potential tenants.

A clean home with decent paint & flooring is a must. I have carpet in a lot of mine but that's more the norm for a northern climate and the type of property's I have. I have considered going to a vinyl plank in the living/dining/kitchen areas going forward.

After that you then need to decide whether things like appliances are important as well as other updates/upgrades. If you add $2-3k in new appliances will you get a payback in the way of extra rent that will pay it back in 3-5 years?

I typically put cheap blinds on all bedroom windows and new but inexpensive lighting in master BR & dining room as well but it depends on what's there.

GrayGhost

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Re: Where to put rehab money
« Reply #2 on: May 14, 2014, 03:06:07 PM »
I've heard that a little landscaping will go a long way if you're looking to sell. If you're looking to rent a SFH out, it's probably still true.

MMM himself seems to pull out the stops when it comes to renovating his rentals, as evidenced in the Foreclosure project. Obviously he doesn't make them into luxury suites, but he definitely has done some pretty nice things for something that's "just" going to be rented out.

In fact, let me quote him:

Quote
I recognize the fact that Tenants Are People Too.