I have just purchased a home I am living and in the process of renovating. I have done the basics like new LVP flooring and paint, working on getting electrical up to code to rent. But the last major renovation would be the kitchen cabinets (it is likely 70 years and looks it) but it would be around 6500 to get all new cabinets and countertops which I think would significantly increase value of the house. The only problem is I bought the house at the exact appraised price (I know it can have a good cash flow due to the demand of renters in the area) and I'm not sure if the increase would be enough to spend money on trying to BRRRR it or if I should just try to get a new house. For reference it code less than 5000 to get this current house. So the question is do renovate and hopefully pull the money back out or just get a new house already with the cash on hand?
Meant to say it Cost less than 5000 for the purchase price and I think I could get another property for less than 10,000
@Anthony San look at it from a rental perspective. If you install the new cabinets for $6500, spread that over say 3 years, will you get more than $180/mo more rent?
The $180 is break-even over 3 years. If you can get an extra $250/mo for a brand new kitchen, I’d say yes! If not, maybe just painting the cabinets and new hardware might be a better investment.
It depends on the condition of the current cabinets/countertops and what the rental market supports. In any case don't think it's realistic to put in $6.5k and expect to raise the value of the home $26k in order to get it back out at 75% LTV.