How do you increase or decrease your Reno budget for rentals?
Just curious what others consider, when evaluating a rental property for rehab.. how much to spend $$$ (more then basics) vs scaling back and doing minimal.
I ask because my action plans have always been to update roof, water heater, or anything that may fail within 3 years. I also do kitchen and bath updates, paint flooring etc. basically make it cosmetically really nice to get top dollar in my market and also be able to do cash out Refi. In doing so, I’ve had better tenants, less headaches and maintenance.
One way to look at an active scenario I’m in. Just bought a place for $125K (3/1, 1100 sqft philly row). As is.. could do paint and minor stuff for a few thousand and rent it for $1100. OR.. spend up to $20K (central air, floors paint electric upgrades, and kitchen bath and roof all new) and easily collect $1500-1600/month (and yes I can still cash out Refi and pull out all my money to invest in another).
I guess my question is in this case.. would you spend the extra money to make a few hundred extra per month? I would.. and I usually do everything up front so I have better quality tenants and minimal work afterwards.
But What are your thoughts on this? Would be interested to hear others opinions or personal experiences. Just want to be sure I’m considering all options in my REI ventures.
Thanks in advance!