Basic Cosmetic Rehab for Rental Property or Multifamily Rental Property

5 Replies

Hey Everyone,

I'm new to the site and so far have been blown away by the amount of input everyone who has experience is willing to share with someone like myself. Thank you for that. I'm in the housing market looking at multifamily rental properties and am finding a lot of value in homes that are outdated and need to be updated. I've demolished to studs and rennovated one foreclosure in the past and can say that I am somewhat confident in my ability to perform a cosmetic rehab ie. new sheetrock, flooring, cabinets, appliances, etc. I do have a few questions as to what you feel are solid investments in the above if I am looking to hold a property long term as a rental.

1) What upgrades improve the price you can ask for rent?

2) What uprgrades/materials should I be looking into doing if I plan on turning a project into a long term rental property?

3) What type of improvements should I be comfortable doing myself vs contracting out besides electrical/plumbing/HVAC?

4) What do you look for in a home that could be a successful cosmetic rehab or even as a flip?

5) What tools should I invest in if I plan on doing this every couple of years?

I understand these are broad questions but any information or direction you guys could provide would be appreciated. Thanks for your time and have a great day.

1) What upgrades improve the price you can ask for rent?

Paint is probably the best. Simple and "sorta" cheap.
Adding a half bath is always good.
Insulation means lower heating bills, make sure you sell this during tours.
Quality, private outdoor space.

2) What uprgrades/materials should I be looking into doing if I plan on turning a project into a long term rental property?

Depends on the neighborhood.
Boston/San Fran/Austin - Granite Counters, High End Lighting, Outdoor Kitchen
Rutland, VT (lower end) - Stuff that is easy to replace

3) What type of improvements should I be comfortable doing myself vs contracting out besides electrical/plumbing/HVAC?

I do demo, framing, painting, tiling, floors, gutters and cabinets. I contract out the rest. I'm working on my electricians certificate at the moment.

4) What do you look for in a home that could be a successful cosmetic rehab or even as a flip?

Level floors, newer roof, newer hot water heaters, newer furnace, newer HVAC and solid foundation.

5) What tools should I invest in if I plan on doing this every couple of years?

Circular Saw
Chop Saw
Table Saw
Cordless drill with 4 back up batteries and 2 charging stations
-US bit set
-Metric bit set
Hammer
Sledge Hammer
Screw Driver Set
And then start buying specialty tools as you need them. Renting is also a good idea if it's a tool you'll only need once every 4 years.

I'll try to address your questions the best I can.

To know what upgrades improve your rent, you may have to look at lots of local ads and compare their amenities and rents. Generally, seems like newer kitchens, lots of storage closets, and fresh paint are attractive for tenants.

You generally want durable finishes wherever possible, depending on your climate and market. Tile instead of carpet, cabinets with plywood boxes instead of particleboard, things like that. I've never been to the northeast, so I don't know if tile throughout is common at all, for example. For our rentals in AZ, we put in tile in the downstairs (high traffic area - kitchen, dining, living) and carpet upstairs in the bedrooms.

Only you can know what projects you are capable of, based on your knowledge and experience. My husband used to do tile, framing, cabinets/countertops, and gyp board when he was in high school, so he's done that kind of stuff on our house and rentals. He can also do some basic plumbing and electrical, but nothing major. My parents were landlords when I was growing up, so I've got lots of painting and cleaning experience. As for buying tools, you'll need to assess how often you think you'll need it in the future, and what you can reasonably do yourself.

1) What upgrades improve the price you can ask for rent?

I think this is a slippery slope. You need to understand your neighborhood. So, you have to have a look at other properties and see what they have. Then make yours match. Being worse than alternatives will cause to have to cut your rent. Being better won't improve your rent. People who can afford more will go to a nicer area. They won't pay extra to rent an especially nice place in a not-so-nice area.

2) What uprgrades/materials should I be looking into doing if I plan on turning a project into a long term rental property?

Stuff to make the property bullet proof. Stuff that lasts a long time. So, tile rather than carpets. The minimal set of appliances for the area.

3) What type of improvements should I be comfortable doing myself vs contracting out besides electrical/plumbing/HVAC?

Personally there's very little I'm not comfortable doing. I don't do HVAC because refrigerants require licensing. But plumbing and electric is no problem. I recently did a gut-to-the-studs-then-knock-out-the-studs-too rehab on my bathroom. The only thing I hired out was a structural engineer to design new beams for the places I removed bearing walls.

The issue is that many jurisdictions require licensed contractors for some trades and require a GC license to pull permits for non-OO properties. If I was serious about rehabbing I'd get a GC license for cities where I was working. But you would still need to hire electrical, plumbing and mechanical subs.

4) What do you look for in a home that could be a successful cosmetic rehab or even as a flip?

An ideal project would be one that can quickly and easily be fixed up and generate a significant improvement in value. Unfortunately those are really hard to find. With more competition from OOs its hard to find any sort of "lipstick rehab" project. So, your best bet may be really trashed properties that no OO will touch.

5) What tools should I invest in if I plan on doing this every couple of years?

I assume you mean tools from Home Depot vs. financial analysis tools. That list can get very long. My view is to buy what you need when you need it. A GC once told me "I could be a house with a cordless drill and a sawzall" and there's a lot of truth to that. Basic hand tools. A circular saw. Impact driver. Tape measures. Eye protection. As you get more serious, a miter saw and air tools will make many jobs easier.

I'm of two minds. One one hand, buying high quality tools can save you over the long run. On the other hand Harbor Freight tools can actually be pretty useful and can often be had for a fraction of the price of the same tool at Home Depot. So I have a Bosch worm drive circular saw that is a joy to use but set me back over $200. OTOH I have a basic Harbor Freight impact driver that is also wonderful to use. If When that craps out I'll probably replace it with something better because its such a useful tool. Most of my air tools are Hitachi, except for a Harbor Freight palm nailer. I needed for a specific project (those beams mentioned above) and it was cheap and quickly available.

You can rent many tools, too. I definitely rent tools that are used rarely and can be used quickly. So, I'll rent something like a cast iron pipe cutter that I can use in a matter of hours. OTOH, for a big tiling project I'll need a saw for days and days. So I have a MK Diamond tile saw like you could rent. I bought it used and have used it on numerous projects and loaned it to friends a number of times.

There has been some great advice above and it just goes to show what an awesome community this is. I'll try not to repeat.

Great quality impact and drill cordless.

CORDED saws, (or cordless and 10 batteries and hope you are only cutting chop sticks)

Nice framing hammer ( get anti-vibe, and it doubles as a sledge)

Non contact voltage detector (these cost $10 and will literally save your life, even if you don't do rehab it's just nice to know what's live and what's not.)

Personally my job deals with electricity so I am very comfortable doing all my own electrical. I think a newbie could run wire for a light fixture or outlet (just a few parts, box, connectors, wire nuts, romex), but maybe you shouldn't put in a new panel.

With the invention of PEX plumbing I don't know why everyone doesn't do simple stuff. Push on and crimp fittings make it so simple to mate to existing copper and then do whatever you want. I hadn't used PEX before and I almost paid a guy $400 to run a new toilet line. $35 later that same day I learned installing same supply line. Just remember light ruins PEX so wrap it up.

Flooring and cabinets are easy, but also cheap to hire out. Personal decision.

Good luck!

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