I am under contract on a townhouse that should rent for $1200 - $1300 a month. The kitchen is in fair condition (50 yr old, lower end cabinets, laminate counter tops and low end older appliances). I got a detailed estimate from the store and I know the material cost would be $7,500 for new all plywood, soft close-white shaker cabinets, granite, stainless steel appliances, farm house stainless steel sink with back splash. Everything was chosen to look good, last long, be the lowest cost I could find and hopefully low upkeep maintenance. I would be doing the install, not my first. The cabinets would take 4 weeks to arrive, resulting in one month of lost rent. My property manager told me to only expect about $50 - $75 more a month for this upgrade. I expect 8 - 12 yrs to recover this upgrade cost from rent. I can expect an increase in the sale value of about 7% ($10,000) but I don't plan to sell it for another 15yrs once the mortgage loan is paid off. Pros: Likely result in renting the property faster, higher rent of about 4 - 6% and if I sell in 15 years, the look should not be too outdated (I hope). Cons: I lose a months rent, upfront cost that I lost to invest now, my time and effort, long return and risk of the project going over budget or take longer than planned. Should I just clean it up and rent it ASAP or invest my time and money?

That's an 7-10% annual ROI on ~$8800, @Autumn Whittington. Is that worth it to you? Can you get a better return by putting that money somewhere else? There is also the competitive advantage to consider. Will you get better tenants who stay longer? That ups your ROI.

I would recommend that you look at other rental listings in that same area and see if your property is really looking the most outdated. If that's the case, consider a few upgrades. I don't think upgrading the sink is a must, but maybe repainting the cabinets for a fresher feel will be more worth your time, and so much cheaper. I agree to wait to do a big overhaul when it's more necessary, like cabinets sagging/breaking, laminate counter scratched up, an appliance breaks. In 15 years of renting, you will certainly wear out these items at least once more, so you can't count on that 7% increase 15 years from now.

i vote no! I think keeping the rent amount lower, as long as kitch is clean and functional, is better strategy going forward. We have been too long pushing rents to the max, so imho better to keep rent competitive and do the kitchen when it is "necessary"

@Autumn Whittington no this is not worth it. The payback period is way to long.

Based on my understanding the kitchen is in fair condition and unit can be rented as is but if you upgrade it as you stated for $7,500 then rent will only boost by $50-$75 a month……or increase sale value of up to $10K – which is basically what you are investing financially and from a time angle…. So there’s see 3 options at play from my viewpoint: • 1) Leave as is if everything is working fine and maybe do minor changes where applicable if people are still renting it like based on what you see around your area…”if it aint broke, don’t fix it”… • 2) Do a bit of TLC - paint existing cabinets, change handles, depending on the condition of the counter top either keep it or replace it, maybe a back-splash and only change appliances if required but I wouldn’t go for high-end stainless steel. Keep the cost as low as possible whilst adding value. • 3) Or, as you stated go all in for $7,500….. Now, as plan is to hold and rent long term I would definitely first explore option (1) and if I don’t like it then I would stick for option (2) --- BUT I wouldn’t go for option (3). I would only go for option (3) unless plan is to sell it and expect a significant appreciation value as a result of it (or from a rent perspective) and based on the numbers you forecast, it seems not worth it. My strategy is always option (1) or (2) where plan is to hold and rent. Below is an example of one of my option (2)….

@Joe Cassandra, good point! Thats why I ask smart people like you to remind me of the thing I know but didn't think of. Metaphorical hand to my face! I say Metaphorical because the CDC says not to touch my face.

I just had this convo about a rental. Decided I'd rather rent it out now rather than lose another month in holding costs. So the ROI being 7-10% probably isn't accurate, as you'd likely have another month of holding costs. You said 4 weeks for cabinets. Then, you have to wait a couple weeks likely for a new tenant to start the lease (unless you nab a signed lease during reno). So your ROI is likely 0% the first year. If your mortgage payment is $800 (i'd guess), you'd make $0 in extra income in holding costs. Oh and utilities you'd be paying too.

@Anna Sagatelova, Fredericksburg VA. Suburbs of DC. I work in Quantico but moving this summer. Doing my last personal buy and rent before I PCS to Hawaii!

@Anna Sagatelova, comps for mostly the same kitchen condition are renting at $1100 - 1300. Those units overall look poorly maintained. Updated kitchens rent for $1200 - 1400. I'll be replacing all the flooring with high end, waterproof, vinyl plank )wood look) flooring so I don't need to worry about replacing carpet every 7 yrs or so, unless a renter tries hard to damage it. Ill also be updating the bathrooms. This reno alone should bring in 1,300 a month with the old kitchen. Ill be on the upper end of what the area supports.

Is it worth it? $7,500 kitchen reno for $50

Account Closed

Investor · Singapore · Member since 2013 · 1k+ posts · 3k+ votes

6y

What kind of tenants are you trying to attract? Who are the typical tenants in the neighborhood? I spent money on my townhouse in San Jose to upgrade all the bathrooms and put in higher end fixtures. I saw a definite improvement in the type of tenants and immediately after the upgrades I got a great tenant who has been there 4 years now. Also its a place I may live in again at some point so that was a consideration as well. In general I would lean towards doing the upgrade if the neighborhood and tenant class supports it. I wouldn't do it on a C grade rental.

1 Reply

Autumn Whittington

OP

Rental Property Investor · Tampa Bay Area, FL · Member since 2019 · 22 posts · 19 votes

6y

@Kenneth Hynes, I'm joining 1/12 in MCBH, Honolulu. I'm very excited for the change of pace and lifestyle.

0 Reply

Nathan GesnerBusiness Member

Moderator

Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes

6y

A couple notes:

1. It may only increase the rent $75 this year but that should continue to increase every year, reducing the amount of time required to recover your costs.

2. There are other benefits like renting faster than the competition, tenants staying longer, higher-quality tenants, reduced maintenance, etc.

If you can afford it and you're not over-building for the market, I think it's worth the investment. It will likely pay for itself in less than five years.

The DIY Landlord Book4.7247 Reviews

Website View Page

1 Reply

Patrick McGrath

Rental Property Investor · Westminster, MD · Member since 2014 · 165 posts · 221 votes

6y

@Autumn Whittington

Ditch the new cabinets. If anything just replace the doors and hardware. Or sand paint and put some nice new pulls on the existing doors and drawers.

Your can get new doors made up for $45-$55 a door or less. But it sounds to me painting the existing and updating the hardware is the best route. Amazon has great deals on cabinet pulls for $35 for 24 modern styles. You could probably get away with spending less than $1500 and get that same rent increase.

1 Reply

Javier Franco

Member since 2020 · 1 post · 0 votes

6y

@Autumn Whittington just paint the cabinets make them look brand new, get renters in the house. Make a buffer, savings for that houses upgrades and once the renter help you save enough money upgrade the cabinets later....

0 Reply

Domingo Cano

Rental Property Investor · Phoenix, AZ · Member since 2020 · 57 posts · 13 votes

6y

If everything is working on the kitchen.

Paint and foil thats all you need to do to add value. If your tenants are having trouble with that kitchen than go for it if they leave next tenants are gonna complain too.

0 Reply

Gary L Wallman

Rental Property Investor · Beavercreek OH · Member since 2018 · 422 posts · 970 votes

6y

@Autumn Whittington

It's not about ROI on the kitchen costs, it's about ROI on your total investment. While the incremental cost may seem high relative to investment, it's your total cost that matters.

I say a resounding yes to replacing the old kitchen. Your property will then stand head and shoulders above the competition. While your increased rent may not be that significant, your ability to place a better tenant should be.

We upgrade all of our units to one grade above the area. "B" areas get "A" finishes. Not only do our rents command a higher rent, but we have way more applicants. This allows us to have higher standards and, as a result, better tenants. Two months into this pandemic we have collected rent on every unit and we have more then 120 doors.

Respectfully, Gary

1 Reply

Steve Vaughan

Rental Property Investor · East Wenatchee, WA · Member since 2014 · 10k+ posts · 16k+ votes

6y

riginally posted by @Carlos Guzman:

Based on my understanding the kitchen is in fair condition and unit can be rented as is but if you upgrade it as you stated for $7,500 then rent will only boost by $50-$75 a month……or increase sale value of up to $10K – which is basically what you are investing financially and from a time angle….

So there’s see 3 options at play from my viewpoint:

1) Leave as is if everything is working fine and maybe do minor changes where applicable if people are still renting it like based on what you see around your area…”if it aint broke, don’t fix it”…
2) Do a bit of TLC - paint existing cabinets, change handles, depending on the condition of the counter top either keep it or replace it, maybe a back-splash and only change appliances if required but I wouldn’t go for high-end stainless steel. Keep the cost as low as possible whilst adding value.
3) Or, as you stated go all in for $7,500…..

Now, as plan is to hold and rent long term I would definitely first explore option (1) and if I don’t like it then I would stick for option (2) --- BUT I wouldn’t go for option (3). I would only go for option (3) unless plan is to sell it and expect a significant appreciation value as a result of it (or from a rent perspective) and based on the numbers you forecast, it seems not worth it.

My strategy is always option (1) or (2) where plan is to hold and rent. Below is an example of one of my option (2)….

Yes! No lost rental time and a return of 10x vs 1/15. Resurface and paint, LVP flooring, etc and still get the rent boost when it's that small.

Here's a kitchen I did this Jan in a $1600/mo house. Costed about $400 since I had the countertop resurface kit already + a few days labor. Blinds and new light fixture were huge additions at only $50.

3 Reply

Gary L Wallman

Rental Property Investor · Beavercreek OH · Member since 2018 · 422 posts · 970 votes

6y

Originally posted by @Steve Vaughan:

riginally posted by @Carlos Guzman:

Based on my understanding the kitchen is in fair condition and unit can be rented as is but if you upgrade it as you stated for $7,500 then rent will only boost by $50-$75 a month……or increase sale value of up to $10K – which is basically what you are investing financially and from a time angle….

So there’s see 3 options at play from my viewpoint:

1) Leave as is if everything is working fine and maybe do minor changes where applicable if people are still renting it like based on what you see around your area…”if it aint broke, don’t fix it”…
2) Do a bit of TLC - paint existing cabinets, change handles, depending on the condition of the counter top either keep it or replace it, maybe a back-splash and only change appliances if required but I wouldn’t go for high-end stainless steel. Keep the cost as low as possible whilst adding value.
3) Or, as you stated go all in for $7,500…..

Now, as plan is to hold and rent long term I would definitely first explore option (1) and if I don’t like it then I would stick for option (2) --- BUT I wouldn’t go for option (3). I would only go for option (3) unless plan is to sell it and expect a significant appreciation value as a result of it (or from a rent perspective) and based on the numbers you forecast, it seems not worth it.

My strategy is always option (1) or (2) where plan is to hold and rent. Below is an example of one of my option (2)….

Yes! No lost rental time and a return of 10x vs 1/15. Resurface and paint, LVP flooring, etc and still get the rent boost when it's that small.

Here's a kitchen I did this Jan in a $1600/mo house. Costed about $400 since I had the countertop resurface kit already + a few days labor. Blinds and new light fixture were huge additions at only $50.

Steve,

As much as the kitchen shows some improvement, it would be difficult to rent to a decent tenant in my neck of the woods.

I just rented this home for over $1500 a month to a couple with a credit score in the high 700's in 2 days.

Respectfully, Gary

BEFORE:

AFTER:

0 Reply

Steve Vaughan

Rental Property Investor · East Wenatchee, WA · Member since 2014 · 10k+ posts · 16k+ votes

6y

Originally posted by @Gary L Wallman:

Originally posted by @Steve Vaughan:

riginally posted by @Carlos Guzman:

Based on my understanding the kitchen is in fair condition and unit can be rented as is but if you upgrade it as you stated for $7,500 then rent will only boost by $50-$75 a month……or increase sale value of up to $10K – which is basically what you are investing financially and from a time angle….

So there’s see 3 options at play from my viewpoint:

1) Leave as is if everything is working fine and maybe do minor changes where applicable if people are still renting it like based on what you see around your area…”if it aint broke, don’t fix it”…
2) Do a bit of TLC - paint existing cabinets, change handles, depending on the condition of the counter top either keep it or replace it, maybe a back-splash and only change appliances if required but I wouldn’t go for high-end stainless steel. Keep the cost as low as possible whilst adding value.
3) Or, as you stated go all in for $7,500…..

Now, as plan is to hold and rent long term I would definitely first explore option (1) and if I don’t like it then I would stick for option (2) --- BUT I wouldn’t go for option (3). I would only go for option (3) unless plan is to sell it and expect a significant appreciation value as a result of it (or from a rent perspective) and based on the numbers you forecast, it seems not worth it.

My strategy is always option (1) or (2) where plan is to hold and rent. Below is an example of one of my option (2)….

Yes! No lost rental time and a return of 10x vs 1/15. Resurface and paint, LVP flooring, etc and still get the rent boost when it's that small.

Here's a kitchen I did this Jan in a $1600/mo house. Costed about $400 since I had the countertop resurface kit already + a few days labor. Blinds and new light fixture were huge additions at only $50.

Steve,

As much as the kitchen shows some improvement, it would be difficult to rent to a decent tenant in my neck of the woods.

I just rented this home for over $1500 a month to a couple with a credit score in the high 700's in 2 days.

Respectfully, Gary

BEFORE:

AFTER:

Looks great. Share the cost and time. I did this one during quarantine. 8 weeks and $25k. No way I would do this for a $1500 rental unless I was retailing it up to sell to an owner-occ, but our markets are different.

1 Reply

Jason Taliaferro

Real Estate Agent · Baltimore, MD · Member since 2014 · 113 posts · 71 votes

6y

There is a lot that factors into it. I probably would as the return is not too bad. And it can help you attract a better longer staying tenant. It also depends on what your tax situation is like. So you aren't really paying the full amount as you will offset gains by it. Better properties tend to attract better tenants and rent quicker. Even if you didn't charge more for rent it could help you see fewer vacancies and quicker turnover between tenants which is real money.

0 Reply

Victor S.

WorldWide · Member since 2016 · 1k+ posts · 1k+ votes

6y

Originally posted by @Gary L Wallman:

Originally posted by @Steve Vaughan:

riginally posted by @Carlos Guzman:

Based on my understanding the kitchen is in fair condition and unit can be rented as is but if you upgrade it as you stated for $7,500 then rent will only boost by $50-$75 a month……or increase sale value of up to $10K – which is basically what you are investing financially and from a time angle….

So there’s see 3 options at play from my viewpoint:

1) Leave as is if everything is working fine and maybe do minor changes where applicable if people are still renting it like based on what you see around your area…”if it aint broke, don’t fix it”…
2) Do a bit of TLC - paint existing cabinets, change handles, depending on the condition of the counter top either keep it or replace it, maybe a back-splash and only change appliances if required but I wouldn’t go for high-end stainless steel. Keep the cost as low as possible whilst adding value.
3) Or, as you stated go all in for $7,500…..

Now, as plan is to hold and rent long term I would definitely first explore option (1) and if I don’t like it then I would stick for option (2) --- BUT I wouldn’t go for option (3). I would only go for option (3) unless plan is to sell it and expect a significant appreciation value as a result of it (or from a rent perspective) and based on the numbers you forecast, it seems not worth it.

My strategy is always option (1) or (2) where plan is to hold and rent. Below is an example of one of my option (2)….

Yes! No lost rental time and a return of 10x vs 1/15. Resurface and paint, LVP flooring, etc and still get the rent boost when it's that small.

Here's a kitchen I did this Jan in a $1600/mo house. Costed about $400 since I had the countertop resurface kit already + a few days labor. Blinds and new light fixture were huge additions at only $50.

Steve,

As much as the kitchen shows some improvement, it would be difficult to rent to a decent tenant in my neck of the woods.

I just rented this home for over $1500 a month to a couple with a credit score in the high 700's in 2 days.

Respectfully, Gary

BEFORE:

AFTER:

Steve could've added those new-style recessed led lights (can-less) for a $100 or less off amazon (for 12) and some wire from home depot + taken the picture with better day-time lighting, and his kitchen would've been popping also. since we're talking cost/benefit here, what was your all-in on that?

1 Reply

Kelly M.

Rental Property Investor · Ellicott City, MD · Member since 2019 · 46 posts · 20 votes

6y

@Autumn Whittington

I would do it. You may lose a month now, but it may rent faster later when you in between tenants? You also might get a better class of tenants, plus less maintenance calls (in theory). Just my opinion. I feel more proud to show properties that are nicer. Might be my market though.

Good luck

1 Reply

Marci Stein

Rental Property Investor · New York, NY · Member since 2011 · 956 posts · 510 votes

6y

Not really worth it as a rental but you will get your money back when you sell it

0 Reply

Brian M Sweeney

MBA, CFP®, EA · Columbus, OH · Member since 2018 · 175 posts · 207 votes

6y

@Autumn Whittington if it increase the value of the property by at least 10k then yes, if not then I would hold off. Also consider just doing paint, etc for much less.

0 Reply

Account Closed

Real Estate Investor · Burnet, TX · Member since 2017 · 29 posts · 17 votes

6y

I'm in your exact position (except for moving to Hawaii) and I have decided to just upgrade the countertops, which look really worn and are peeling off in places. I may paint the cabinets too. I would absolutely not do a farmhouse sink unless it's a farmhouse. That's a trend that will scream 2010s in 15 years, I think. I do like to incorporate a little Fixer-Upper aesthetic with light fixtures or other low-cost updates, though. Good luck with your move and God bless you for your service.

0 Reply

Greg Moore

Rental Property Investor · Tampa, FL · Member since 2019 · 128 posts · 166 votes

6y

@Autumn Whittington please explain what the word ‘Wort’ means. Is this a wort like the ugly kind that grows on your hand? Is it ‘fly’ talk and this is a new, cool word? ‘ e.g. Dis iz wort it yo!’ Or is it a typo?

0 Reply

Nancy P.

Naperville, IL · Member since 2018 · 330 posts · 357 votes

6y

We're in an upscale market so we almost always redo the kitchen, but anymore I just paint the cabinets. Of course you have to see if shelves bow, there's any mold, do drawers work smoothly....I house we lived in had a family of five boys and then a family of six boys and the cabinets were just destroyed from years of slamming. But in general, even old bottom-range cabinets of 50 years ago are made of more solid stuff than anything but quite high range cabinets today.

0 Reply

Jill F.

Investor · Akron, OH · Member since 2016 · 2k+ posts · 4k+ votes

6y

We often find it to be beneficial to do kitchens even if we don't want to sell for a couple of reasons:

the apartments will appraise higher and allow us to use equity for additional purchases.

It reduces turnover because tenants can't find anything as nice so they don't move

We have found recently renovated apartments to be easier to maintain because...everything is new

People that are willing to pay top-dollar for an extra-nice place usually take good care of it.

Also, we usually try to buy in-stock cabinets to avoid delays and reduce turnover time. Maybe wait and reno at the next turnover and order the cabinets when the next tenant gives you notice so you can get 'er done without such a long delay if in stock cabinets aren't available where you are.

1 Reply

Is it worth it? $7,500 kitchen reno for $50 - $75 more a month?

Is it worth it? $7,500 kitchen reno for $50 - $75 more a month?

Most Popular Reply

45 Replies