To Over-Do or To Under-Do? – That Is The Real Estate Investment Question
I guess it’s a philosophical difference. I know several investors who have a bare-bones approach to getting rentals ready and maintaining them. I see their point because they are looking at it as a revenue generating object. Maintain just enough to protect the object and the investment.
Want more articles like this?
Create an account today to get BiggerPocket's best blog articles delivered to your inboxSign up for free
On the other hand, I tend to go in the other direction and perhaps do too much to get a property ready and maintain it. But here’s the deal: my philosophy is to increase value and attract better tenants and keep them satisfied.
I don’t know if I’m right, but there is method to my fix-up madness. I want to attract a tenant who will be pleased with the house. I also have this idealistic notion that people will take better care of the property if they see I care about the property. Okay, you can quit snickering now.
Here is a list of reasons why I go a little overboard on fix-up and maintenance.
- I want the tenant to know that I care about the property and that it means something to me.
- I want the tenant to be proud of where they live.
- I want the property to be much more valuable when I sell it than when I bought it.
- I want to get a reputation of renting good homes in good condition and keeping them maintained.
- I want to be respected as a landlord and attract tenants through word of mouth.
- To minimize turnover and vacancy.
However, I do see that doing too much can negatively affect return on investment, so I have learned from other investors how to be frugal and not throw money away on vanity and a overdeveloped sense of aesthetics. Like everything else, I guess it’s about balance, but I tend to go more in the direction of doing more rather than less in hopes of getting a better return in the long run. Naive? What are you, and over-doer or an under-doer?