Remodeling my first house for a rental.

3 Replies

Im excited and new! I bought a $140,000 single family home a few years ago to live in and I have been reading real estate books and I am motivated to get started. At the moment I am doing about a $15k remodel and repair to this house. New siding and windows and painting exterior and interior (trying to decide on replacing carpet or removing the carpet for a renter friendly idea), fencing replacing broken garage door and some landscaping. quite alot of hours and Im doing all the work myself which is adding up. I will be finished comming into spring next year and the house will be worth $175k. Ive paid down the house to 130k. So at this point I am trying to decide what to do. Sell it and with the amount of hours I put in, the 25kish income would hardly make me feel good. 

the rental market here is BOOMING. so I could get top dollar as a rental. Once all the updates are done, maintaining the rental should have low overheard for years. and I would show about a $3000 cash flow a year.  I could use that extra money for repairs or months where there isnt a renter. I feel like this is the route I would want to take and move into another fixer upper.  Id like any advice and tips.

@Aaron Edmondson why not just get the house liveable (functional and safe) and rent it out for a little below market because it’s not perfect, and let the tenant pay down the mortgage as the value rises. When your ready to sell, get in there and do the work or hire and make the numbers work significantly better than sitting on all that vacancy.

Welcome, @Aaron Edmondson ! Excited and new are the best attributes when you join Bigger glad you found the forums!

You have multiple good options, including those you listed, and the recommendation of @Christopher Leon . I don't have a perfect answer for you, since that will depend on your long-term goals. But if I were you, these are a few of the questions I'd be asking myself:

 - what is my goal for getting involved in real estate investing? Financial freedom? Leave my day job? Pay off debt? A little more spending money on the side?

 - do I want to be a buy and hold investor / landlord? 

 - do I have the time / desire to manage a remodel (of new house) while managing tenants (in current house)?

If you are working towards financial independence or to leave your day job, and you're comfortable with the idea of being a landlord, I like the idea of investing the resources to update the house now, and putting in a renter. Your cash flow would go to a maintenance fund, and could also be saved towards the downpayment for your next investment property. The beginning of your snowball!

If you're more interested in a little cash on the side, or paying off some immediate debt, updating and then selling the property may make more sense for you. 

You have more options available than these two, but identifying your goals can help you think through those, as well. 

Best of luck, Aaron - love your enthusiasm and look forward to following your success!

Thanks for the replies! So my strategy is going to be to have property I am holding, Im 34 and I can see this as a great retirement solution. Even if I am not seeing any immediate cash in my pocket, I would be reinvesting any cash back into principals, or down payments and fixes to new properties. "Snowballing" ;) . I wish I could say my first property was a home run, but it wont be. It WILL however be a great experience and my first step towards my next opportunity.

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