How much to renovate in order to rent ?

19 Replies

Hi! I'm debating on how much to update before trying to rent. I "think" I can get $2700-$2900 for monthly rent (if I'm off I'm open to suggestions PLEASE!) Will it still rent when the interior is in original 70s condition? I was thinking of painting over ugly wallpaper for sure.  

Other items I was considering to get it rented faster, but will it be worth the cash flow?  New Carpet, a couple of new light fixtures, epoxy countertops, faucets, kitchen cabinet pulls, etc.  Here's a few pics for reference.  Thank you so much for all of your wonderful input!

The pictures are too small for me to really tell. My recommendation is that you compare it to other homes in that price range to see if it's above or below in quality. If homes of this size are renting for $3,000 a month but they have new appliances, updated kitchens, new paint and flooring, etc., then you'll have to come down in price to remain competitive. That doesn't mean you need to go way down, but you want people to feel they're paying a fair price for what they're getting.

You may want to consider adding a pool service as part of the rent price to ensure it's maintained properly. Too many tenants don't know how to maintain it and the cost of cleaning/repairing can be pretty hefty.

@Melissa Villegas , it all depends on the area and the comps in your neighborhood. Depending on the area some people like upgrades, others don't care but want prime location. The rent is dependent on those things as well. Maybe you can see what other homes are renting for in the area and the condition of the inside because that will give you a good idea if you can rent it for more or less. Working in property management, also being an interior designer, you want to appeal to most people and unfortunately most people want updated styles. Respectfully I would do as much updating as possible, it will only increase the value in your home.

@Melissa Villegas , this all depends on your market and how it compares to the other rents.

For example, my rentals in Tempe, AZ are all remodeled completely within the last 5 years but I just visited my girlfriend's sister in Chicago this week.  The quality for rents was VASTLY different!  But in Chicago rental market, you can get away with original 1970's conditions.

Quick tips:

  • Get Comps:  Go on Zillow, or whatever the top listing site, and pick out the 5 nearest rentals in your $2.7-$2.9k price range.  Compare the quality, size, amenities, etc.  This will quickly tell you if the rental can compete or even achieve that rent price.
  • Remodel vs As-If Rent:  Put together your budget for all remodels to achieve the rent price tier you want to rent for.  To get $2.7k, is it a complete remodel, minor upgrades or possible with as-is condition?  After you figure out how much remodeling costs to increase rent, you can figure out how long it takes to pay back the remodel costs.  I'd try to get my money back in 2-3 years for bigger renovations. 1-2 years for more minor.
  • Remodels:  Quick, easy and affordable wins.  Those upgrades can quickly add up; plus labor cost.  Fans and light fixtures are a quick way to modernize a rental.  Carpet should be replaced every 7-10 years in general.
  • Allow Tenants to Paint:  This may sounds crazy but let your tenants decide to paint the house.  Put in your listing description "$200 paint allowance".  With the understanding tenants have to pick a reasonable color, no hot pink.  Tenants like to paint their walls anyways.  This is a great start to show you as a reasonable landlord that wants them to feel at home.  Plus, they'll do the labor for you!
Originally posted by @Nathan G. :

The pictures are too small for me to really tell. My recommendation is that you compare it to other homes in that price range to see if it's above or below in quality. If homes of this size are renting for $3,000 a month but they have new appliances, updated kitchens, new paint and flooring, etc., then you'll have to come down in price to remain competitive. That doesn't mean you need to go way down, but you want people to feel they're paying a fair price for what they're getting.

You may want to consider adding a pool service as part of the rent price to ensure it's maintained properly. Too many tenants don't know how to maintain it and the cost of cleaning/repairing can be pretty hefty.

Thank you! There's not a lot of comparable properties for rent, so I feel like it's been a bit of a guessing game.  Yes, I agree 100% about the pool service and most tenants not caring for pools appropriately.  

Originally posted by @Kenny Dahill :

@Melissa Villegas, this all depends on your market and how it compares to the other rents.

For example, my rentals in Tempe, AZ are all remodeled completely within the last 5 years but I just visited my girlfriend's sister in Chicago this week.  The quality for rents was VASTLY different!  But in Chicago rental market, you can get away with original 1970's conditions.

Quick tips:

  • Get Comps:  Go on Zillow, or whatever the top listing site, and pick out the 5 nearest rentals in your $2.7-$2.9k price range.  Compare the quality, size, amenities, etc.  This will quickly tell you if the rental can compete or even achieve that rent price.
  • Remodel vs As-If Rent:  Put together your budget for all remodels to achieve the rent price tier you want to rent for.  To get $2.7k, is it a complete remodel, minor upgrades or possible with as-is condition?  After you figure out how much remodeling costs to increase rent, you can figure out how long it takes to pay back the remodel costs.  I'd try to get my money back in 2-3 years for bigger renovations. 1-2 years for more minor.
  • Remodels:  Quick, easy and affordable wins.  Those upgrades can quickly add up; plus labor cost.  Fans and light fixtures are a quick way to modernize a rental.  Carpet should be replaced every 7-10 years in general.
  • Allow Tenants to Paint:  This may sounds crazy but let your tenants decide to paint the house.  Put in your listing description "$200 paint allowance".  With the understanding tenants have to pick a reasonable color, no hot pink.  Tenants like to paint their walls anyways.  This is a great start to show you as a reasonable landlord that wants them to feel at home.  Plus, they'll do the labor for you!

This is very thorough and helpful info, thank you for taking the time!

Originally posted by @Tyler Clark :

@Melissa Villegas, it all depends on the area and the comps in your neighborhood. Depending on the area some people like upgrades, others don't care but want prime location. The rent is dependent on those things as well. Maybe you can see what other homes are renting for in the area and the condition of the inside because that will give you a good idea if you can rent it for more or less. Working in property management, also being an interior designer, you want to appeal to most people and unfortunately most people want updated styles. Respectfully I would do as much updating as possible, it will only increase the value in your home.

 Thank you, Tyler. I was afraid you might say that :) but I do appreciate the honest and helpful reply.  

It is hard to draw the line between renovating and over renovating. If you are an 'owner' you will be inclined to over renovate so you need to look at the picture through 'renter' eyes. That is a very nice house and it would be easy to spend way more than you need to. I think you had the right idea in your original post.

Keep in mind you don't have to do all the updates at once as well.  I would first focus on what will get the most bang for your buck which tends to be paint and updated flooring and maybe some new fixtures.  Wallpaper is dated and I would diffidently get rid of it.  From there you can look to see what your budget allows and see what makes sense.  I like to do small updates on every turn, for my most recent I updated the bathroom flooring.  It is dated and stained but would have rented as is for the same amount but feel it adds long term value and the market won't always be as hot as it is now.  Pools here aren't as common as I imagine they are in Texas so they may be more necessary where you live but I avoid them here.  Remember though tenants sort properties based on price so by including pool maintenance in your monthly rent you may not get as much traction as you would listing it as say 2700/month+ whatever monthly maintenance costs are.  You get the same monthly however it feels different to the tenant and puts you closer to the top of the list.  

Half the houses that rent in my market look very similar to those photos. Yes, improving it will allow you to get more rent, but you have to evaluate the return. I am a fan of low cost high impact approach. Things like paint, light fixtures, bath fixtures, cabinet handles can all update the appearance with minimal cost. 

I wouldn't paint over the wallpaper. Rent a steamer and remove it, then clean the wall of glue and paint. That is just one of those things you want to do right the first time. It makes it easier to patch and paint later. I would paint the wood paneling in the bedroom and bathrooms the same color as the wall, just sand and prime it first. I would replace the counter top, rather than epoxy coat. That works well, because you can replace the sink with stainless steel and faucet at the same time. The kitchen appliances could use an update to stainless steel, although that wall oven will be expensive. 

I would keep the old cabinets , since they are solid wood and probably built crazy durable. Any new cabinets are particle board and will not hold up to tenants abuse. Use Murphies oil soap on the cabinets to bring them back to life and maybe update the handles.

If everything is in good cosmetic shape, but just dated, you may want to consider renting it as-is for a couple years. Then if a tenant damages something or the rental market softens, take a month or two as a chance to make renovations. In most markets people are renting ANYTHING right now, so maybe go for fast cash.

Just remember the number one rule of updating your rental. You are not living there, so it doesn't have to be up to your personal standards. Millions of people live in homes that are updated to lower standards that you may prefer. They are fine/happy with their situation. Any decision to update should be solely based on maximizing income per dollar spent. It is just business. 

It is hard to tell the condition from the photos.  Pool service is a good idea and add that to the rent.  The dining room and nook don't look too bad.  Family room changing the light fixtures (do not go over the top) would help.  On the fan you could leave it or change the covered on the lights.  Bedrooms look fine, you could paint the doors white to match the trim.  bathrooms painting the wood on the bottom of the walls white will help.

the kitchen is dated, but if it is in good condition, leave it.  Don't bother with new hardware.  It is a nice size.

I would look at the walkway around the pool near the building corner.  It looks rough and maybe a trip hazard.  I would fix that.

I would replace the carpet as it becomes stained or worn, but not all at first unless the condition is bad.  

I would remove the wallpaper in the kitchen and paint it, and same for the bathroom.

Maybe new counters in the kitchen and facet.  

Leave the paneling, surprisingly some of it is coming back into style, and its in a bedroom /office room.  If it was in bad condition, them paint over it.

Forget the little things like knobs and handles.

Depending on the condition in the bathroom maybe new floor and vanity/tub.  But that would be condition dependent.

Originally posted by @Adam Martin :

Keep in mind you don't have to do all the updates at once as well.  I would first focus on what will get the most bang for your buck which tends to be paint and updated flooring and maybe some new fixtures.  Wallpaper is dated and I would diffidently get rid of it.  From there you can look to see what your budget allows and see what makes sense.  I like to do small updates on every turn, for my most recent I updated the bathroom flooring.  It is dated and stained but would have rented as is for the same amount but feel it adds long term value and the market won't always be as hot as it is now.  Pools here aren't as common as I imagine they are in Texas so they may be more necessary where you live but I avoid them here.  Remember though tenants sort properties based on price so by including pool maintenance in your monthly rent you may not get as much traction as you would listing it as say 2700/month+ whatever monthly maintenance costs are.  You get the same monthly however it feels different to the tenant and puts you closer to the top of the list.  

Adding the maintenance cost outside of the actual rent is a great idea.  Do tenants usually do their own lawn care, or should I try to add that in too?

Originally posted by @Melissa Villegas :
Originally posted by @Adam Martin:

Keep in mind you don't have to do all the updates at once as well.  I would first focus on what will get the most bang for your buck which tends to be paint and updated flooring and maybe some new fixtures.  Wallpaper is dated and I would diffidently get rid of it.  From there you can look to see what your budget allows and see what makes sense.  I like to do small updates on every turn, for my most recent I updated the bathroom flooring.  It is dated and stained but would have rented as is for the same amount but feel it adds long term value and the market won't always be as hot as it is now.  Pools here aren't as common as I imagine they are in Texas so they may be more necessary where you live but I avoid them here.  Remember though tenants sort properties based on price so by including pool maintenance in your monthly rent you may not get as much traction as you would listing it as say 2700/month+ whatever monthly maintenance costs are.  You get the same monthly however it feels different to the tenant and puts you closer to the top of the list.  

Adding the maintenance cost outside of the actual rent is a great idea.  Do tenants usually do their own lawn care, or should I try to add that in too?

Depends on the lawn care but I have tenants responsible for lawn and snow maintenance.  The lawn care is debated here a lot as people worry about liability but I feel the risk is low.  To me this is what makes sfh’s great is I tell tenants I provide the walls and appliances the rest of the maintenance is on them.  I do trim bushes and mulch once a year to ensure it gets done and they don’t perform a hack job.  For trees if a branch falls it is on them if it is a larger limb or requires a chainsaw let me know and I’ll come by.  I’m trying to make this as passive as possible but in your case would contract out the pool.  If they don’t want to do their own lawn care I tell them to hire it out and there are still plenty of people in the neighborhood that do so just call the number on one of their trucks.  If I am charging the tenant I would do the same thing but add a markup for my time.  

Looks pretty dated.....only someone local will know if the upgrades are worth it or even necessary. Although you will have to at some point, so maybe do it before you start...? You're probably looking at $10k to bring this up to snuff, maybe...?

PS - Don't just paint over the wallpaper....have it skim coated with drywall mud first. It'll look better and last longer.....

@Melissa Villegas

1. Assuming you personally never plan to move into this property.

2. Plan only to use as rental. 

3. Other surrounding properties DO NOT have pools.

I would suggest you fill in the pool, as there is a great potential for liability for you if someone has an accident in the pool. 

@Melissa Villegas as the others have put it it really depends on the area that your house is located in and by looking at the pictures all those they are small I could tell that you do need to upgrade your kitchen and the bathroom to 2021 standards this will have the effect of boosting rent price as well. If you are willing to do the upgrade and need some tips Reach Out.

@Melissa Villegas as the others have put it it really depends on the area that your house is located in and by looking at the pictures all those they are small I could tell that you do need to upgrade your kitchen and the bathroom to 2021 standards this will have the effect of boosting rent price as well. If you are willing to do the upgrade and need some tips Reach Out.

@Melissa Villegas

Can't make out much on pics as to small and can't zoom. Couple of thoughts, rents are high in your area (apparently), so your property should reflect market conditions. And, do not skimp and save a nickel today that will cost a dollar tomorrow. Example, painting over wallpaper vs removing wall paper then paint. Also, do not lay carpet! Install a nice vinyl tile product. Spending money on reliable products look better and will last longer.