Dallas, TX · Member since 2014 · 650 posts · 53 votes
As some of you may recall, I'm buying the house I grew up in as my first rental property.
My parents have taken good care of it but it's a 38 year old house. They've been empty nesting for about 12 years.
That said, there's little things here and there that, if I were selling it, I would certainly fix.
However, since I'm going to be renting it, should I invest the time and money into doc long it up to the same level?
For example, it was probably painted about 11 years ago. If I were selling it, I would paint it. Should I paint it for a tenant?
Other things are on the outside of the house that could have some wood replaced here and there.
Roof was replaced about 7 years ago. It's a 30 year roof.
So my questions are more general in nature about how much to pour into something that someone is probably not goi g to take as good a care of if they owned it.
Another argument would be to fix it up that way when they leave I know exactly what they destroyed and can keep some of there security deposit.
If the paint is good leave it. Fix rotton wood. Upgrading is not necessary.
Be careful not to make assumptions about what holds true across different markets.
While upgrading may not be needed where you invest, there are other markets where it is absolutely a necessity.
I can't provide much insight on the market the OP is investing in, but it's important to note that upgrades aren't always an unnecessary burden.
I made no assumptions about the market. I was addressing the investor. He is buying his first rental. He is getting his feet wet for the first time. Doing more then the mininium to get it presentable may not be the best investment of his money.
And I knew everyone else would tell him to fix everything and upgrade.
I understand where you're coming from, but whether this is his first investment or one thousandth, the market doesn't care. What is considered 'presentable' varies DRASTICALLY from state to state, city to city, neighborhood to neighborhood; shoot, sometimes even block to block. I completely agree he shouldn't stretch himself to thin or build beyond the point which he'll receive an ample marginal return on cost; but I do think it would be misguided to state that upgrades, in every case regardless of the market, are unnecessary.
Unfortunately, sometimes upgrades ARE APART of doing the minimum to get it presentable for the market it's in.
Agent/Investor · Murphy, TX · Member since 2013 · 542 posts · 304 votes
10y
I would more concerned with the mechanical - plumbing, electric, HVAC. How old is the water heater? Short of a fire, a water heater will cause more damage than anything else in your rental. On the other items, rotted wood lets water and pests into the property That should be fixed. As far as the paint goes, which house is a good prospective tenant going to rent, yours with 11 year old paint and rotted siding or mine with fresh paint? You can fix everything now and attract the best tenants or get called in the middle of the night when the water heater starts leaking or the AC goes out or the faucet starts leaking and the 38 year old valve under the sink won't shut off because it is corroded?
Investor · Fremont, CA · Member since 2016 · 13 posts · 3 votes
10y
We have 3 rental properties in Bay Area. To stand out from the competition, I give the choice of single neutral paint color to prospective tenants. All 3 tenants have stayed for more than 3 years. Make them feel at home. Paint makes a huge difference. And it's a small price to pay to make tenants stay longer in your house.
Buy & Hold Owner · Redlands, CA · Member since 2015 · 5k+ posts · 2k+ votes
10y
Think marketing as a landlord - - what will draw more & better tenants to me over my competitors? Curb appeal and first impressions matter!
As a property manager, think asset preservation - - what are the immediate needs to keep operations running. Then consider, would any upgrades improve property value when I sell or improve tenant satisfication?
Investor · San Jose, CA · Member since 2014 · 294 posts · 113 votes
10y
Hey Steve S.
I'd have to agree with Todd Plambeck fix the things most likely to give you a headache more often up front and attract a better tenant. Being pro active is better than reactive.
All the best to you moving forward.
If the paint is good leave it. Fix rotton wood. Upgrading is not necessary.
Be careful not to make assumptions about what holds true across different markets.
While upgrading may not be needed where you invest, there are other markets where it is absolutely a necessity.
I can't provide much insight on the market the OP is investing in, but it's important to note that upgrades aren't always an unnecessary burden.
I made no assumptions about the market. I was addressing the investor. He is buying his first rental. He is getting his feet wet for the first time. Doing more then the mininium to get it presentable may not be the best investment of his money.
And I knew everyone else would tell him to fix everything and upgrade.
If the paint is good leave it. Fix rotton wood. Upgrading is not necessary.
Be careful not to make assumptions about what holds true across different markets.
While upgrading may not be needed where you invest, there are other markets where it is absolutely a necessity.
I can't provide much insight on the market the OP is investing in, but it's important to note that upgrades aren't always an unnecessary burden.
I made no assumptions about the market. I was addressing the investor. He is buying his first rental. He is getting his feet wet for the first time. Doing more then the mininium to get it presentable may not be the best investment of his money.
And I knew everyone else would tell him to fix everything and upgrade.
I understand where you're coming from, but whether this is his first investment or one thousandth, the market doesn't care. What is considered 'presentable' varies DRASTICALLY from state to state, city to city, neighborhood to neighborhood; shoot, sometimes even block to block. I completely agree he shouldn't stretch himself to thin or build beyond the point which he'll receive an ample marginal return on cost; but I do think it would be misguided to state that upgrades, in every case regardless of the market, are unnecessary.
Unfortunately, sometimes upgrades ARE APART of doing the minimum to get it presentable for the market it's in.
Environmental Scientist / Investor · Statesville, NC · Member since 2015 · 94 posts · 41 votes
10y
@Steve S. I would also agree with @Todd Plambeck. I just bought a rental and relator told me she wouldn't do a thing to it. So what did I do? I tore out and replaced kitchen, new SS appliances, ceiling fans, refinishing original hardwood floors, new paint, new roof, etc.
Could I have done less? Absolutely, and possibly should have. But I would rather spend more on the front end and have less headaches down the road, be able to choose from a pool of potential renters instead of just hoping someone will take the place, and also plan recouping some of the extra costs in slightly higher than market rents. Also (and I may be wrong...may depend on renter), but I believe if your rental looks like you don't care about it, you can be pretty sure the renter wont either. It has defiantly crossed my mind more than once I may have over improved, but I believe the potential lack of headaches in the future will far outweigh the added expense. Good luck!
None of the items you have mentioned I would call "upgrades". They are simply routine maintiance and the items I would do prior to renting. Since you do not know how long your tenant may stay or how they are going to take care of the place the painting and minor repairs as if you were selling.
I would not upgrade by changing kitchens , baths or anything of that sort.
When you are done take as many pictures as you can to document the condition prior to renting. This is important to be able to use the security deposit for the damage they cause.
Beaverton , OR · Member since 2014 · 23 posts · 9 votes
10y
both investing more in the houese now or later are good options. If im new in the business i would probably invest min and have some money in the case i need to replace heater in middle of winter.