BiggerPockets

I just completed re-habbing my upper unit in my duplex. Turned out really nice. Most who came to look at it said it's the nicest they've seen. Hence it rented in 4 days. I do just about everything myself, so I save a ton in labor costs. If there's something I can't/won't do I'm lucky enough to have a little team of friends who do it on the cheap for me.

I know MikeOH says he is responsible to supply a clean, safe place to live, and I agree. But at the same time I'm not sure what that means exactly. I walk into houses that I'm looking at as possible investments, and I see old wood paneling, old wood or worse yet, metal cabinets, dated bathrooms, etc...I don't want to put a zillion dollars into these, but I don't want to be considered a "slumlord" either. Where do you draw the line?

I feel sometimes I'm passing on these houses because "in my mind" there's too much work to do. Should I overlook some of this stuff, and look at it as strictly a cashflow thing? Basically "it's not about pride of ownership, it's about cashflow"

I think my apartment rented so quickly because it stands out. There's a lot of these homes where my duplex is located that I think would be great investmnets from a cashflow standpoint, but need, again, "in my mind" to much work. This is a lower income area, but home price remain relatively low (25k-40k) and rents are still pretty stable ($375-$550). My standards are obviously a bit higher, but maybe I need a "standard" adjustment?

Are these "dated qualities" acceptable to all the other landlords out there? I hope I'm making sense.

Thank you in advance for your responses.

Norm

I've always felt you could overbuild for a particular area and reach a point of excess. I definitely feel you are doing the same thing from a rental point of view. Pick the next level of rentals if you want to fix it up that much- and get a better return on your repairs,imo. Especially when you are using productive time to swing a hammer instead of duplicating your successful acquisitions...

This is a lower income area, but home price remain relatively low (25k-40k) and rents are still pretty stable ($375-$550). My standards are obviously a bit higher, but maybe I need a "standard" adjustment?

Yes, you need a "standard" adjustment. With rents of $375 to $550 these are low income rentals. You are spending more than necessary to rehab your property and the only one that will benefit is the tenant who thinks they just hit the lottery. After all, it's not everyday that a low income tenant gets to trash the Taj Mahal. (you'll learn what I'm talking about soon enough)

I walk into houses that I'm looking at as possible investments, and I see old wood paneling, old wood or worse yet, metal cabinets, dated bathrooms, etc

I would paint the wood paneling; paint the metal cabinets if they're in good shape; and paint the cabinets in the bathroom (keeping the old sink and faucet if it's servicable. Even when I do these things, I often have low income tenants come in and say "wow, this is nice". That's because the competition in this price range has rentals that are MUCH worse! CLEAN AND SAFE - that's the key.

The difference between you and me is that you are deriving pride of ownership by doing a beautiful middle class type rehab for low income rentals. You will be rewarded by the tenants trashing your rental. I derive my pride of ownership from the money the property will generate. I am rewarded with cash I can spend that would otherwise be spent over-rehabbing the property.

Providing safe and clean housing does not make you a slumlord. Quite the contrary, the city will love you if you would be one of the few landlords that actually makes their property safe and clean, and actually screens the tenants.

Good Luck,

Mike

We rehab with the view of keeping our ongoing maintenance costs as low as possible which means trying to make the places as indestructible as is feasible.

Nothing is indestructible but, replacing all floors in a unit with tile, minimizes the damages caused to carpet, wood floors, etc..

The tenant wants rugs, they can furnish and take them with them. Remember to keep the grout dark, grey or darker, as that minimizes the dirty look of light grout needing cleaning and re-sealing.

Replace fluorescent lighting with cheap easy access standard bulb fixtures. We use the same fixtures in all units, again for stocking and replacement. Nice fixtures,but cheap, and try and find fixture covers that will not break when the tenant drops it while replacing a bulb.

No horizontal blinds but rather vertical blinds where we must provide window treatments, and always the same manufacturer so that we can maintain a stock of replacement parts.

All rooms, all units, painted the same, and clauses forbidding repainting of any type, as well as no smoking whatsoever, all the same paint, color and manufacturer. We use home depot UltraHide antique white. Available in 5 gal buckets and we always have some in stock.

Bathrooms, floor to ceiling tile, no soap dished in the bath, tenants sometimes use them to get out of the tub, or stand on them to shave their legs, and pull them out enough for water to get behind them.

No bathroom window in the shower, it is a leak waiting to happen.

The end result for us, is that when a tenant moves out, it is a quick clean of the tile floors, fix the holes in the walls, touch up the paint job, re-caulk where needed and the units look wonderful, immaculate, and rent easily.

For tiles, whenever possible, we buy closeouts, from Home Depot or Lowes, watch your lot numbers, and store them in our storage garage. You can often find nice travertine tile at less the .70 a square foot. Buy the mortar and grout as and when needed, do not store, do not listen to the HD or Lowes sales person when he offers to pick them out to go with your tile order.

Learn how to do the tile work yourself, my husband has done the floors in all of our units, he now hires temp help as his back is not what it once was, but he knows how do the layout, can oversee the workers doing the laying. A throw-away tile cutter is $80.00 at Home Depot. They sometimes last three or four units!

The cost winds up comparable, a bit more expensive, to having someone lay new carpet, and tile will last three or four times carpet and the cleanup costs for carpet or two or three times those of tile.

Cheers, the basic message, rehab for lower maintenance costs.

great advice lucia!

It doesn't take long for tenants to trash a nice apartment. I just installed my first set of commercial carpets in an apartment. I've had to many of the nicely padded mid quality rugs trashed. They got the big box retailer commercial grade cheap carpet with no padding this time.

-Michael

I agree with all. But I hope proper screening pays off. This couple is engaged, she's pregnant, and they both are attending college. Both are taking Criminal justice courses no less. She aspires to be a police officer. He works 2 jobs, she also works. They don't smoke, and don't "party much" as per they're app. To me, it seems these kids have they're sh*t together. Now that's not saying they're not going to trash the apartment, but it does say something about they're character. Hopefully I made the right choice...time will tell.

I'm for indestructible (after learning the hard way).

Last time I replaced a counter in a college rental I had the carpenters use salt-treated wood and/or exterior grade plywood for everything out of sight.

Spill your keggers on that!