We have flipped 4-5 rental houses in the last 6-8 weeks, and at that number, we have been pushed to be more efficient, more skilled, faster, and extremely calculated with everything. Not that we weren’t before, but to replicate a process time and time again within a short period of time requires extra attention.
Within our market, and specifically where we rent, own, manage, and sell turnkey properties, we have to get a rental license through the city, and then we have to have inspections every few years on our properties. The past month or so, we have gone through 3-4 of these inspections — on properties we have just flipped and on properties we had flipped in the past.
There have been quite a few little things that have come up on old properties we had flipped; not necessarily major issues, but little things. Little, annoying things we could have fixed the first time and not had to deal with (and more importantly, pay for!) later.
Here is how we lay out our rental house flips in detail.
First, we use the same body paint color and trim paint color on every house. This enables the contractor not to have to guess what is happening or wonder what color to pick. We also go through and replace plumbing fixtures and most/all of the shutoff valves, and we flush the lines and have a plumber run the main line out to the city connection.
In the bedrooms and living space, we keep the hardwood floors that are so prevalent here, and we make them beautiful. Personally, I love the look of the hardwoods. I think they are beautiful, they look rich and elegant, and tenants LOVE having a beautiful home for their friends and family to walk into. I also love that hardwood floors hold up. They wear well. And worst case scenario, I can have my floor guy come in and clean up or polish a section of floor if need be. We only use carpet in bedrooms and hallways, and only if we have no other option.
For the kitchen, we clean up and paint cabinets if they are in good shape, and we put a new counter, sink, and faucet in. You have to make sure you have a GFCI outlet in the kitchen, and also one in the garage and bathroom. Kitchen floors, we either keep the hardwoods if we can, or we come in with the same vinyl flooring — again, using the same floors in every house. When you look at a picture, you know it’s our house whether you know the address or not.
From the standpoint of the power and electricity, we make sure everything is in working order, putting all new plugs and switches in. We don’t have ceiling fans in these rentals; usually we have the small dome lights in every room — they’re safe, don’t break, and look clean.
We paint everything new. Ceilings, walls, trim, doors. Everything is clean, spick and span, and highly desirable to the tenants who are more and more looking for nicer and nicer places to live.
We also have the HVAC serviced, and depending on the condition of the house, we also have the vents cleaned as well.
When the city inspectors come into our houses, they explain to us how they wished everyone would do their work to the extent we do. It also means that our inspections go pretty quickly, and we might have a few little things to fix — we don’t have much, which translates to not much time to sacrifice and not much expense to pay.
On the exterior we make sure everything gets primed, caulked, and painted. The gutters are cleaned, sealed, painted and siliconed, or they are replaced. We have started replacing windows that could probably be kept, but need a lot of work. The vinyl windows are easy to install, and we can do a whole house for $1,500-2,000. However, if the windows are in great shape, we just clean them up, paint them, and make sure the storms on the old style windows are all installed and working properly.
I am very thorough on the paint. It’s easy to get lazy with this step, but we make sure everything is scraped, primed, and painted. It’s worth it for the longevity of the paint job. I’d rather do it now than deal with it later.
We replace roofs (and have done 3 in the last few weeks), but we don’t always on the rentals. If they are not leaking, in good shape, and will last for some time longer, we leave them. It’s a judgement call on whether you want to wait on that expense or deal with it all up front. We deal with each one individually.
We replace front doors, pick great colors of the exterior, and typically add a small amount of landscaping or mulch at the front of the house to make it have great curb appeal and also keep soil and dirt from getting away from the foundation.
We have found it to be much less expensive replacing things tenants are touching — like a counter, stove, faucet, or shower manifold — right up front. We replace it now, for silence via the tenant later. We are spending a little bit more money up front, but we are seeing the benefits not only for faster turnaround times on renting our houses (we have dozens of people who don’t have a rental house for!), but also the rental inspectors are happy, and our investors (and my wife) and ecstatic we can generate great returns and have very few calls to fix problems in the house.
What do you do in your rentals to work proactively, and why? Is there anything you don’t do up front and wait on?
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