Don't over-improve rental property. To keep your cash flow at optimal levels, don't spend too much on upgrades for a rental property that will likely need maintenance and repairs during turnovers anyway.

Easy to say, harder to know the line. A nice looking place rents quickly. 

depends on your market and class that you are investing in.  My B properties, have ceiling fans in all bedrooms, central Heat and air, upgraded windows and have washer and dryer connections. 

My C properties do not get ceiling fans, as cash allows I upgrade to HVAC and better windows. I prefer them not to have washer and dryer connections because it seems they install washers that leak and seem not to notice if the vent is not connected.  

It is hard to find the right balance, but many upgrades do tend to make for more maintenance.  I like to fix it right the first time so we do not come back and redo things, but some renters are harder on property than others.

I agree on the above two comments.  I have been guilty of over-doing it and I am literally seating down this New year weekend to draft a very strict budget that I want to stick to.  Initially I was going to replace all windows in the duplex that I am buying but I don't think I will do that.  I may opt to do this in parts and focus on the top unit for now, doing the bottom later.  I also have aretainment wall that is just about falling over, that requires attention.  Some regarding is needed which to me cannot wait as it causes foundation issues that later get costly.  Lastly I would like to install some simple privacy type fence, but I think a simply white vinyl fence will do it for now, again keeping cost in mind.  A few smaller things needed in the enterior (drywalling, some paint work, installation of bathroom vent and some electrical), but even that I think it will either be a DIY job or higher a handyman for these (electrical and drywalling).  I really want to be extremely careful on this as I am still paying down past remodel so I definitely understand where is coming from with is great advice.  I can also see where @Johann Jells is coming from, because I tend to prefer my properties look nice.  I also always house hack so I do have a tendency to want to make them a place I too will like to live, but I know, I know..... I have to be careful not to overdo it.  I always like to attract the right kind of tenant so that plays a part in my strategy so thus agreeing with Johann on this, but also agreeing with Priyanshu.  great post thanks and could not come at a better time, I close on the 3rd!

Unless you have a problem with trespassing, I would not spend money on fencing.  Fencing generally a poor investment.  I have one fenced because undesirable tenants in a duplex behind my property.  

Retaining walls, Yes,  always take care of things that affect structure.  Foundation, water leaks fresh or waste, and any electrical issues.  The rest of my improvements are rewards for good tenants.  Little things make tenants appreciate that you are making improvements.  

When I first get a property, I try to make sure it is rent ready, paint, floors, electrical, plumbing etc.  Once rented, unless structure related, I do not do much to properties, unless maintenance man needs some thing to do.  (Unfortunately, getting where he always has something to do.)

Based on class of property I fully agree. Most landlords will over improve/over spend when working on a property. They spend on fluff that has no bearing on rental rates or spend extra on efficiency upgrades when utilities are in tenants name.

Few actually know what impact upgrades will have relying primarily on the assurance that it will be easier to rent or the tenants will be happier. This is rarely the fact and it is always more prudent to calculate expenses based only on potential additional rent. That is usually the only aspect that is relevant. 

Capitol expenses are unavoidable, improving a property should only be about increasing income.

Absolutely you want to maximize your returns by not over-improving. 

As part of my a 32 unit portfolio I bought in June, there are 12 townhome units. My contractor, property manager and I discussed 3 levels of improvements for them as they came empty. The sweet spot was the middle option. Yeah I could have achieved slightly higher rents and had cooler units with the highest level, but the returns were abysmal for the additional costs. There were also 2 duplexes that it would have been nice to fully rehab, but for 1/3 the cost we could capture 2/3 of the rental increase so we went with that option. 

I will, however, "over-spend" an additional bit (maybe $500-2k) per unit that is probably not be necessary to achieve the rents we are going for. But I will do those to help ensure I get the rental rates I want, with the tenants I want, and to minimize the vacancy times by having a slightly nicer property/finishes.

Thanks @Ron Flatt , I really appreciate the advice. and yes the fence here is intended to deter people from the neighboring apartment complex sitting on the property as they smoke their weed.  No lie I saw it when I went to complete inspections.  I am planning on going cheap though, just so I can create some kind of boundary.  The rest as you say, because they have the potential to cause bigger issues unless fixed, I will address.  I really like that you put there, "Improvements are rewards for good tenants".  I am careful now to watch myself and only reward good behavior so tenants can continue to appreciate what they are getting.  :)

Originally posted by @Thomas S. :

Based on class of property I fully agree. Most landlords will over improve/over spend when working on a property. They spend on fluff that has no bearing on rental rates or spend extra on efficiency upgrades when utilities are in tenants name.

Few actually know what impact upgrades will have relying primarily on the assurance that it will be easier to rent or the tenants will be happier. This is rarely the fact and it is always more prudent to calculate expenses based only on potential additional rent. That is usually the only aspect that is relevant. 

Capitol expenses are unavoidable, improving a property should only be about increasing income.

@Thomas S. one thing you said really stood out to me and was sort of like the slap I needed, ""or spend extra on efficiency upgrades when utilities are in tenants name" I will definitely keep this in mind as I was going to redo all windows (a cost that was easily going to be anywhere from $10K to $20K and just for windows) but recently had to stop myself and really re-think my strategy. This is why I love BP, for the more seasoned REIs can help steer us newbies the right way with the, "hey, you! Yes you!.... the hell are you doing? Now how do you intend to get an ROI by doing that? think about it for a little now will you?" LOL, I know I exaggerate here but in all honestly I truly do appreciate BP for this kind of mentoring to newbies, mentoring that you all probably don't even realize you are giving directly and indirectly. Cheers!

@Austin Fruechting what do spend the extra $500-2K on that you think gets you the most bang for the buck?

Originally posted by @Paul Bowers :

@Austin Fruechting what do spend the extra $500-2K on that you think gets you the most bang for the buck?

It varies based on the property, but usually just slightly nicer finishes than are necessary to make the property stand out a bit more... Maybe a nicer vanity than standard. Maybe painting kitchen cabinets to look a bit more modern. Maybe stainless instead of white appliances if replacing them all. Maybe slightly nicer looking vinyls/laminates if those are going in, etc. Maybe replacing something that doesn't necessarily need replaced but makes a visual impact. I also typically provide washers/dryers too. Usually that adds a little to the rental amount, but even if it doesn't add to the rent, they rent quicker. One less month of vacancy over the life of the washer/dryer pays for them.