Los Angeles, CA · Member since 2014 · 12 posts · 3 votes
Hello,
I just had my first vacancy in a 4 unit apartment building that I have owned for about two years. It is located in Los Angeles, fairly blue collar, strong rental area a few miles west of USC. The building is subject to rent control.
The unit that is vacant is my largest and highest priced unit. The prior tenant was paying $2,200 /month for the 4 bedroom, 2 bathroom unit.
It is in reasonable shape and was upgraded by the prior owner to some extent. The level of workmanship is of a handyman quality level so could certainly use further improving.
Below is a list of possible improvements/ upgrades I could make to the unit and I would love any advice as to what improvements have provided the best return on investment in terms of commanding higher rents. The list is in no particular order.
Remove popcorn ceiling, paint walls and ceilings flat white
Recessed lighting throughout
Central air with a rooftop package unit and over-the-roof ducting
New cabinet over the stove with a microwave vent hood
Dishwasher
Shower enclosures (currently just has shower curtains)
New white vinyl windows (remove and dispose of the existing window covering),
Bead-blast the front screen door and spray-paint white (or just replace)
Replace the few remaining original painted cabinet doors
Switch to new Decora outlets and switches
Basic handyman work like recaulking the bathtubs
Thank you for the help and looking forward to hearing about your experiences.
Note Investor · Orlando, FL · Member since 2016 · 135 posts · 79 votes
10y
You have to run the numbers to see what return on investment you will get. AND you want to create a place that is a little better than what is around you without going crazy. General rule is a house has to be comfortable to live in (hvac) and kitchen and baths are your biggest bang for your buck.
Really, the math is pretty simple. it rents for 2,200 now. If you do X, what will it cost and how much can you raise the rent as a result? Is that a good enough return for you? Along with the math, there are the soft benefits to think about. I know that a nice place that is not overly expensive to rent means I can usually get a longer term tenant. Less tenant turnover is a great thing and a much better ROI.
Final note on paint and finishing. Do not paint a rental with flat paint. It is impossible to keep clean and you will be repainting with every tenant turnover. We use a very light beige color (neutral, not cold or warm) and we paint walls, baseboards and trim all one color. If we have to turn it over and repaint, you can get in there with a sprayer and paint it in a couple of hours. We paint the doors semi gloss white and the ceiling either flat or eggshell white. On our less expensive rentals, our beige is also exterior semi gloss. Semi gloss is very easy to clean and exterior is more durable, especially inside. You may choose satin if you think semi gloss is too much.
Los Angeles, CA · Member since 2014 · 12 posts · 3 votes
10y
@Eddie T. Thank you for the reply! Sorry, I should have been more specific:
The unit is under moderate rent control meaning that when vacant, I can raise the rent to anything I want. Once a new tenant is in place, I am then restricted on how much I can raise them each year.
So, it is definitely important to get the initial rent as high as possible as the new tenant could stay indefinitely.
Investor · Longview, TX · Member since 2012 · 631 posts · 186 votes
10y
@Kevin Z. it sounds as if you have a large number of items that need updating. I do not k is your area so I would recommend viewing photos in ads that show what other owners are dong in your market and like/ kind of rental. You will know where to start.
Rental Property Investor · NY · Member since 2013 · 844 posts · 350 votes
10y
Ceilings I would do only if the cost was minimal. HVAC is very expensive so I would not do that until it absolutely needed it. Recaulk the bathroom if it looks that bad and new kitchen cabinets. Windows depends how bad they are. I would not do the lighting. Show enclosure is a tough one I would see what other apt in the area have.
In my opinion non of the items listed would contribute to a higher rent except maybe adding air. The rest are cosmetic items that most tenants will not even notice.
Doubtful air will warrant a high enough rent increase to justify expense.
I just had my first vacancy in a 4 unit apartment building that I have owned for about two years. It is located in Los Angeles, fairly blue collar, strong rental area a few miles west of USC. The building is subject to rent control.
The unit that is vacant is my largest and highest priced unit. The prior tenant was paying $2,200 /month for the 4 bedroom, 2 bathroom unit.
It is in reasonable shape and was upgraded by the prior owner to some extent. The level of workmanship is of a handyman quality level so could certainly use further improving.
Below is a list of possible improvements/ upgrades I could make to the unit and I would love any advice as to what improvements have provided the best return on investment in terms of commanding higher rents. The list is in no particular order.
Remove popcorn ceiling, paint walls and ceilings flat white
Recessed lighting throughout
Central air with a rooftop package unit and over-the-roof ducting
New cabinet over the stove with a microwave vent hood
Dishwasher
Shower enclosures (currently just has shower curtains)
New white vinyl windows (remove and dispose of the existing window covering),
Bead-blast the front screen door and spray-paint white (or just replace)
Replace the few remaining original painted cabinet doors
Switch to new Decora outlets and switches
Basic handyman work like recaulking the bathtubs
Thank you for the help and looking forward to hearing about your experiences.
Best,
Kevin
I don't know if you already have hardwood or laminate flooring, but that's the one thing that really makes a difference with applicants looking for units and they will pay more rent for them.
As to your list, these are my personal opinions, from a tenant's point of view, as I now rent:
Yes to removing the popcorn ceiling.
Don't paint white - you can paint the ceiling & trim white, but paint the walls an off-white, like bone. White is too sterile and unwelcoming.
NOOOO to recessed lighting! The lightbulbs are really hard to change and get those stupid cans back in place. I hate recessed lighting.
As far as central air - I don't know that tenants would care, and it would be more maintenance dealing with filters, etc. Plus, replacing a window unit is easy-peasy and cheap. And I doubt tenants would care. Plus, it's cheaper to be able to just cool the rooms they want.
I became a renter a few years ago after retiring from my resident manager job, and both have had the microwave vent units over the stove. I like having the microwave off the counter. But, the vent is a joke. They don't vent outside. I never use it. It just sucks the steam/grease up and blows it back in your face LOL. A vent that actually vented outside would be great.
Dishwasher - would be heaven! Most places don't have them in CA anymore because of water usage. If you are paying the water bill, you might want to keep that in mind. I'd love to have one, though, again, because it would free up my counter of the dish drainer which you pretty much have to leave out all the time, if you don't have a dishwasher.
Shower enclosure - could not care less. Plus, the glass doors are a pain to keep clean. I prefer shower curtains for that reason.
Don't know what you mean by remove existing window covering? Do you mean curtains/blinds? I only care if windows work, and having energy-efficient ones is great. Note about the kind you can clean from inside - they often get out of alignment and leak. That's what I have now and I don't like them. The upper window will end up sliding down a little bit, and the wind and rain will come through it. The only way to get it aligned again, is to open the window all the way, and then shove them both upwards as hard as I can. I live where there are really severe wind/rain storms, and this can mean that while I am opening this window all the way up and trying to shove both panes up as hard as I can, I have 60 mile an hour wind with sideways rain blowing straight at my face through the screen. So, I vote no on the windows that you can fold inside to clean. Nice idea, but they are a pain. And they leak.
Don't know what bead blasting is, but a white screen sounds kind of weird and like a dirt magnet to me lol. Just a nice, tight screen on a decent-looking door would be fine with me.
What do you mean by few remaining cabinet doors? Do you mean your kitchen cabinets don't match? I just want nice looking cabinets that open and close easily and don't stick. The ones in my unit were new when I moved in and look nice, but they're super cheap and are starting to peel around the edges - pressboard with laminate. I think you'd be best off getting something that would wear better than the super cheap stuff.
As a tenant, I just want outlets and switches that work, and preferably a lot of them in convenient places.
Yes, to basic handyman stuff.
But, of what would matter the most to me of the above? Hardwood/laminate floors. Dishwasher.
Also, a washer/dryer or hookup - I would kill for :-)
Real Estate Investor · Chicago, IL · Member since 2014 · 286 posts · 159 votes
10y
On seeing a popcorn ceiling, I would immediately go outside and be sick. It is sixties scary. Recessed lighting is 70's scary. DW and CA for sure. Unless you pay electric.
Contractor · Los Angeles, CA · Member since 2015 · 4k+ posts · 1k+ votes
10y
I would say go for all except enclosures on shower, also if you are already doing HVAC, might as well install microwave over stove that vents OUT and not simply circulates around the rooms.
Los Angeles, CA · Member since 2014 · 12 posts · 3 votes
10y
Thank you for all the replies! Lots of good ideas/ information.
@Account Closed , the apartment does have laminate throughout. As to the cabinets I mention, the kitchen was redone but some of the storage cabinets throughout the unit have the older original ones with several layers of paint. So I meant just replacing those for something nicer looking.
There is no question that any of the items on the list would make the apartment better. It is just sometimes difficult to separate what we all know we would want in the places we live from which of these upgrades will actually yield a return.
I am very on the fence about the HVAC. It is very expensive but my property manager has found in his experience that it is an amenity that people will pay more money for, especially when showing in hot weather. I wonder if going with a few nicely installed window/ wall units would be a good compromise vs. central?
Because the apartment is 4 bedrooms, I am sure the dishwasher would be appreciated. That said, I pay the water bill so I need to consider that.
Personally, I have found that a lof the basic cosmetic fixes actually go a long way for what they cost. People just have a nicer first reaction if the unit looks nice.
Note Investor · Orlando, FL · Member since 2016 · 135 posts · 79 votes
10y
You have to run the numbers to see what return on investment you will get. AND you want to create a place that is a little better than what is around you without going crazy. General rule is a house has to be comfortable to live in (hvac) and kitchen and baths are your biggest bang for your buck.
Really, the math is pretty simple. it rents for 2,200 now. If you do X, what will it cost and how much can you raise the rent as a result? Is that a good enough return for you? Along with the math, there are the soft benefits to think about. I know that a nice place that is not overly expensive to rent means I can usually get a longer term tenant. Less tenant turnover is a great thing and a much better ROI.
Final note on paint and finishing. Do not paint a rental with flat paint. It is impossible to keep clean and you will be repainting with every tenant turnover. We use a very light beige color (neutral, not cold or warm) and we paint walls, baseboards and trim all one color. If we have to turn it over and repaint, you can get in there with a sprayer and paint it in a couple of hours. We paint the doors semi gloss white and the ceiling either flat or eggshell white. On our less expensive rentals, our beige is also exterior semi gloss. Semi gloss is very easy to clean and exterior is more durable, especially inside. You may choose satin if you think semi gloss is too much.
Realtor · Sequim WA & Port Angeles, WA · Member since 2016 · 164 posts · 78 votes
10y
I like doing the a/c & d/w.
say no to shower doors, tenants do not like them. they don't want to clean the tracks or deal with soap scum on the doors and they feel that they are unsanitary. I used to be an onsite manager less than 6 months ago in CA so that would be my feedback.
the other stuff is not that important, it won't net much gain in rents.
your annual maintenance is critical on each unit - caulking, changing flappers and batteries on smoke detectors, co detectors and changing air filters.
West Covina, CA · Member since 2015 · 6 posts · 2 votes
10y
To help decide if you should remove the popcorn ceiling, you should have it tested to see if it contains asbestos. If it doesn't, then it is a simple matter of spraying the ceiling with water and then scraping it off. The trick is not to spray too much water or it compromises the drywall. I did it in a few rooms of a house. Everything worked out great except the family room, which was a permitted add-on. After removing the popcorn ceiling from that room, I found that the finishing plaster underneath was uneven. It took a lot of work to smooth it out to get a flat ceiling. But removing the popcorn ceiling was one of the best upgrades I have done. It adds a more current look to the home and makes the rooms look larger, in my opinion.
BTW, I dropped off a sample to a company in Pasadena, CA (or maybe it was South Pasadena) to get the asbestos testing done. It took maybe a week to get the results and was not very expensive.
Reno, NV · Member since 2016 · 328 posts · 97 votes
10y
Personally, I would leave the ceiling as-is. I have popcorn ceilings in the home I live in now and they don't bother me. HVAC would be a good idea depending on cost, but that's another thing that could be costly if repairs are needed.
No dishwasher if you pay water -- again something else that could go wrong. Me and my husband got into a tussle because I wanted to put garbage disposals in the units. We try to minimize our repair possibilities.
Investor · Tarzana CA and Houston, TX · Member since 2015 · 326 posts · 130 votes
10y
this area is so HOT that if you have a vacant unit you should just put it on the market way higher than your expectations and you will probably get done
the problem is what to do with the proceeds in this market