First rental property

11 Replies

Hello everyone!

I just purchased my first home with 25k in equity. I was able to open up a HELOC for 19k and will be using it to remodel the house. The house needs a complete make over, this includes bathrooms, floors, and kitchen. My question is for the kitchen. What kind of cabinets should I invest in? Particle board prefabricated ones? or the more expensive plywood kind.

@Nathaniel Tant

First of all congratulations on your first purchase. It would help if you tell us more about this property. What kind of tenants are you trying to attract and what do the kitchens look like in your area that have been remodeled and are rentals?

You can look on Zillow or Realtor.com etc. to see what other investors have done for cabinets. 

@Nathaniel Tant

Have you ever completely "made over" a house with a $19K budget before? Have you remodeled a bathroom and/or a kitchen? What's your experience laying flooring? Are you planning to do some or none of the work, and who will be doing the bulk of the work? Do you feel qualified to lead a home renovation and why, and how much time and effort do you plan to divert from your other activities to completing the series of projects that you envision?

@Debbie C.

There wasn't enough information on those sites for my area. Only one house is listed for sale and no houses are for rent. I live in an area where rentals go quickly and houses sell quickly. I'd say I live in a middle class neighborhood that butts up to a upper middle neighborhood. 

Originally posted by @Nathaniel Tant :

@Jim K.

I don't understand why so many questions are asked when I'm simply asking for advice on the type of cabinets to be installed in my kitchen. 

Because it seems you're focusing on what's largely a cosmetic issue about your renovation instead of the more important things you need to get this renovation done. This is an extremely common trap that people new to this business fall into on their first renovation, fussing over largely inconsequential details instead of thinking about the fundamental problems they need to address first. In the real world, outside of television flip shows where manufacturers are trying to upsell you on the cabinets and weekend real estate seminars where the people running them want to impress you with their taste, minor design choices such as the choice between MDF, and plywood for kitchen cabinets are way, WAY down the list of renovation priorities you should be focusing on at this point.

But since you insist -- I like the plywood cabinet carcasses. Definitely go with the plywood. They're so NICE and just give your kitchen that right amount of va-va-va-voom! And about the extra cost...OMG, you are, like, SO worth it.

@Jim K.  

My situation is unique. I do not have a time limit, nor do I have a strict budget. I will be living in this property for a little over a year while I get it updated. The first project I am tackling is the kitchen and I need to know what kind of cabinets are best for rental properties. I want things to last through heavy abuse and if spending a bit more on plywood over particleboard is best, then thats what i'll do. I am looking for functionality and durability. 

@Nathaniel Tant

Based on everything you have said about the area, as well as wanting them to last a long time, I would go with the plywood cabinets if you can do them in your budget. Its great you will be living there while doing your remodel so you can shop around for the best value.

I own sfh's that I purchased to keep long term, so when we remodeled the kitchens, the quality of cabinets was important to me. Some of the cabinets purchased are plywood and the uppers are 36" tall, this is in the better areas, we have had good tenants, and 10 years in the cabinets still look great.

Good luck to you.

Originally posted by @Nathaniel Tant :

@Jim K. 

My situation is unique. I do not have a time limit, nor do I have a strict budget. I will be living in this property for a little over a year while I get it updated. The first project I am tackling is the kitchen and I need to know what kind of cabinets are best for rental properties. I want things to last through heavy abuse and if spending a bit more on plywood over particleboard is best, then thats what i'll do. I am looking for functionality and durability. 

Well at least you're talking a bit now about brass tacks instead of window dressing.

Nathaniel, your situation is FAR from unique. What you are talking about doing is typically called a "live in flip." Investors who do this typically sell the single-family home after they're done, not rent it. This is because when you sell your primary residence after living in it for two years, our beloved Uncle Sam, within some limits, DOES NOT ASK YOU TO PAY A DIME IN CAPITAL GAINS INTEREST ON YOUR GAIN. This is a huge benefit, and many investors choose to take advantage of it.

You, on the other hand, are planning on staying in this one property to renovate it and get it updated, and then go on renting it. Military members, for various reasons, do this ALL THE TIME. Let's say you do that. Are plywood cabinets worth it? This is not, sadly, as simple a question in reality as those who know little about plywood, particle board, or MDF want it to be. Plywood's greatest value is that, in the event of water leakage, it can be usually dried out without significant damage and does not tend to swell up and fall apart in the same way that particle board and MDF do. It is also quite a bit more durable in holding hinge pins and screws under heavy loads. But does that make it always worth buying? No, not at all. In any rental property, you should always protect the cabinet base under the sink with a heavy piece of waterproof vinyl or rubber sheeting glued in place. With particle-board cabinets, that takes away three-quarters of your water damage worries immediately and costs you about $20-$30.

Does it really make any financial sense in a rental to have cabinets done in plywood twenty feet from the sink? It's hard to find a situation where it does make sense, but you need them to match, and so...you pay through the nose. That's how the whole "plywood cabinets for rental" gimmick works these days.

How much are you renting the property for? If it not upwards of $1500 a month, I don't see any reasonable justification for the expense of plywood cabinets. In low-cost properties, I HAVE custom-made my own plywood carcasses in heavy exterior sheathing (the glues used to make this kind of rough plywood are made to stand up to outdoor abuses) for the sink cabinets, and bought the rest cheap in particle board. But I've been a hobby woodworker for years -- this is probably not your cup of tea and you wouldn't want to invest in the equipment.

Now let's get back to my original point. Cabinets are one of the last things to go in during a kitchen rehab -- you should be focusing more on demo, electrical, and plumbing right now, figuring out how to cart all your construction debris away, getting your planning and permitting in order. Good luck, Nathaniel.