Renovate it or leave as is?

[Bryan M.]

I've flipped about six houses in my career as an investor but have been recently decided to change my strategy to rentals. I am closing on a duplex later this month and have been going back and forth on whether to renovate the kitchen with simple stock cabinets, laminate countertops and new appliances or leave it alone. I figure I could get this done for $5,000. Rents in the area for a 2/1 typically go for $650 but I want to try and push closer to $700. Also, I'm using a line of credit for the purchase so it will be leveraged and I'm planning on refinancing later on. Should I leave the kitchen as is or renovate it while it's vacant (the other side is currently occupied paying $550/month)?

Thanks for the advice!

[Stephen Akindona]

This is very subjective to you as an investor and everyone will have different opinions! Some will say if you can get market rents or close to market rents then leave it alone! I personally always like to rehab my new acquisitions so I try to buy at a price that allows me to do so! If you can rehab the unit and still hit your return targets, I will always vote to rehab on the front end! It is unlikely that labor and materials will be cheaper at some undefined point in the future as prices tend to go up! 

What you have is not bad, but does look dated and new countertops, new appliances and even just painting the existing cabinets can really make your unit pop!