I have a rental that currently has good tenants, but I am well overdue on maintenance on my property. A few years ago, I needed cash out of my equity and my property appraised for 20k under market value. I am trying to build back equity in my property before I have no choice but to make repairs as I feel they are around the corner. How do I find out exactly what to fix and how do I make repairs when I have good tenants currently in the property?
Give tenants proper notice for an inspection and either thoroughly walk the house yourself and write down everything that needs to be done or bring someone that knows what to look for.
Then schedule repairs on days that work for both tenant and contractor. If they are good tenants then they should understand that these repairs will improve life inside these units.
Thank you Tim. I have found a good property inspector in my area and am just waiting on response from tenant on their availability. Thank you for your advice.
Unrelated question... with a plus membership, am I able to include my picture on profile? I don't want people to think I'm spamming. Also, do you recommend a pro membership for a new investor like myself, or will plus work?
You can post your picture with a free membership as well. I agree with what has been said previously that an inspection/ walkthrough of the property would be best. For big ticket items like replacing the entire kitchen etc. where tenants would not be able to live in the unit during renovations, you might have to wait until the tenant moves out, pay for them to stay somewhere else temporarily, or try to schedule the rehab for when they are on vacation (if they go on vacation).
Thank you Aaron. Great advice!
Hmmmm. You're hiring a property inspector to tell you what needs to be fixed? As in someone that does home inspections?
I'm not sure thats the route I would take to be honest. I would get a contractor that is well versed in a few things and have him check some of the key things out and then you should walk thru the home yourself and see what you think should be fixed and/or updated.
I'd want a contractor to check the roof, gutters, downspouts, etc to make sure there or no leaks and the water is getting away from the house as it should. Have an hvac guy come clean/certify the hvac system.
And then really its about seeing what needs to be updated from a cosmetic and/or functional sense.
i.e. Are there problems with low water flow in the bathrooms/showers? Maybe a new shower head will help? Are the countertops damaged or dated? You can replace them fairly easily/cheaply with stock countertops from menards or lowes.
Update the cabinet handles? New toilet? New vanities in the bathrooms? Or maybe just get a new vanity top. Usually the vanities themselves aren't bad. Its just the tops that are ugly or dated.
But I don't know that I would bring in a home inspector and pay them 250 or 300 bucks or whatever their fee is. Better to have the contractor look at something like a roof. And then better that you look at what needs to be updated inside. Maybe its just a repainting of the interior.
In terms of how you handle the repairs with the tenants, just be sure you ask them if there are any things they think should be fixed so you can hit those (assuming they are really bad). Don't ask the tenants what you should update though. They'll want a new house. :-)
But if you hit the repairs and then maybe do one nice upgrade - even if its a new countertop or kitchen backsplash or appliance, they'll be more than willing to let someone come in there to update anything else.
Just wondering. Why do you think you have repairs that are needed in that house? Have the tenants asked you to fix stuff that you haven't? Not all houses will accumulate repairs. Sometimes we just get lucky.....
Thank you Mike, this really has me thinking. Besides having to replace the garbage disposal and letting me know the front door could use weatherstripping, the tenants have been fine. Really, what has me concerned is I did a refinance last year on the property and it appraised for 55k. The market value for the property based on comps was 75k so it appraised 20k which is way below value. I could not see anything on the appraisal that warranted the low appraisal. The property could have used carpeting (which has since been completed) and a fresh coat of paint on the walls would have helped, but at the time, I just needed some additional cash from the property as it was free and clear at the time (now has a 37k lien on it). Even a year ago I didn't look at my investment property as my business. It was just a nice extra source of income. After reading "The Book on Rental Property Investing" as well as a few others, my mindset has completely changed, and I want this property to be the beginning of my real estate investing career. What I am wanting to do is put equity back in the property so I can have the cash when needed to buy my next property. I just don't know the best way to go about it. I'm just new to the game and could use as much advice as I can get.
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