when updating a rental property

16 Replies

Aside from the standard updates like new appliances, flooring, paint, etc, how do you determine what to upgrade in a rental? 

I'm assuming you'd base it off what type of people you want living there, what the potential rents are, but does it go deeper than that?

Does anyone add premium upgrades such as recessed lighting under kitchen cabinets, in home speakers? 

Also, is it ever worth going all out with expensive appliances and other updates instead of basic ones ex. hard wood floors vs cheaper alternatives

Im gonna say that everything you do should have a gauge on it. The ROI gauge. Im thinking along the same lines as you. But ultimately you still have to take into account what the market value of the property is and not overspend.

Reggie I definitely agree with you. I'm trying to figure out what works to make sure I dont overspend or underspend. 

You should see what comparable rentals in your area offer. If there are features that your rental is missing you may consider adding those. You should check to see how fast you would make your money back. For example if you spend $2000 on granite countertops and only see $50 a month more. It might not be worth it. It would take you almost two years to see a return.

You should also consider things that would extend the life of your rental. Like the mechanicals and roof.

appeal to 90% of the market 90% of the time.  So you want to keep things in line with what a certain area expects.  If you are in the ghetto, don't start spending a ton of money putting in higher end finishes (I openly admit to putting granite and stainless appliances in my ghetto rental, however granite is VERY cheap here in FL and basic stainless appliances from scratch and dent stores are not that much more expensive and add a lot of impact.)

I have another rental in a nice, blue collar neighborhood.  I could have put in pot lights but that neigborhood doesn't really call for it.  People would love it but they wouldn't want to pay extra for it. I simply changed out the old 1980's light fixtures for a nice modern light fixtures and ceiling fans.  

Backsplashes are a great DIY project to add impact.  it can be as simple as subway tiles with a strip of glass mosaic running through and it gives a higher end appearance to the kitchen while only costing a couple hundred bucks to do.

they make led under cabinet lights that you simply touch by hand and they attach with a magnet so they can even be pulled off to use like a flashlight.  they are dirt cheap and don't require you to wire them to a switch.  

for me personally, the higher end products are also about durability.  Here in florida, we have very sandy soil.  Carpets and laminate flooring get wrecked fast.  The sand scratches the **** out of hardwood and laminate.  Tile is the way to go.  it's a little more expensive than the other options but it will last forever and when a tenant turns over, I'll only have to mop floors not replace them.

thanks for the great information, David!

I just installed under cabinet LED in a unit for absurdly cheap. This roll of LED tape and a plug-in supply for $18, plus a couple of strips of 1"x 1/16" aluminum to put the LED tape on in a double row.

http://www.amazon.com/gp/product/B005GL5UG2/ref=oh...

http://www.amazon.com/gp/product/B007ME2HMQ/ref=oh...

A little soldering and wiring, plus the foresight to have put inside a cabinet an outlet wired to the overhead light, and it looks great.  By comparison, to replace the crappy halogen Seagull Lighting bulbs in my own home undercab with LED's would be $20 per bulb. 

as someone previously said, I aim to be attractive to my ideal tenant. Secondarily, I aim to consistently improve the property. In ,y area, the housing stock is older, so I am trying to stay ahead of depreciation. Plus if I ever want to get out of a property, I don't have to do anything really but list it.

We don't do low end and we are told often that our places are the nicest ones the applicant has seen. This doesn't involve granite countertops and such, just clean, updated where needed and solid properties that are appealing. I want my properties to be as passive as they can be, which means low maintenance tenants. I feel if I provide the house that a person who has their stuff together would live in, I will find that person.

I feel the same way about keeping it low maintenance and updated but it seems like the low maintenance things are more expensive (tile flooring, granite countertops etc) it seems to me that putting in the durable upgrades makes the most sense even in a lower end rental unit because it won't need to be worried about for a long time

@Jeff Libby 

Low end rentals need durable upgrades for sure.  Your logic is correct.  In my latest adventure (rents for $1,250) I pulled all the cabinets and vanities.  I'm replacing all the shutoff valves while everything is out, so I hopefully don't have to worry about those things for a long time.  I'm not putting granite tops, but I am putting a nice laminate counter that will surely last a long time unless the tenant puts a bonfire pit on it lol. 

The problem you ultimately face to answer your question is:

What do you do to minimize time on market and attract the best tenants possible?  

Monthly rental rate and local competition is where your answer lies at the end of the day.  Copy the competition but one up them on one or two things if necessary to answer the question. Of course, if your renting for $500 a month it probably doesn't matter. 

that's not a bad idea. I guess checking out nearby rentals would be a good way to ensure yours is better than the average one on the market.

You would be surprised how many landlords are renting crap, because they are cheap.  It's usaully not hard to one up them and find a better tenant as well. 

I recommend that every rental and flip house that you invest in a plumbers snake, I snake every rental and flip house before I start work and after im done. it gives your peace of mind and hopefully no clogged drains. I actually have a camera also, but a good camera is a bit pricey. in Utah, and other areas they used lead to seal the pipes and trees like to penetrate the lead and create havoc.

not a bad idea Mike. I know you can get it scoped for a hundred bucks or so but it seems like you have a cheaper alternative.

Originally posted by @Mike Gallagher :

I recommend that every rental and flip house that you invest in a plumbers snake, I snake every rental and flip house before I start work and after im done. it gives your peace of mind and hopefully no clogged drains. I actually have a camera also, but a good camera is a bit pricey. in Utah, and other areas they used lead to seal the pipes and trees like to penetrate the lead and create havoc.

 Just curious if you have one of the pro snakes like a K-50 or one of the Home Depot snakes? I'm asking because if you use it often enough, I can see the 50 paying off in the long run, though I'm curious how often you find yourself using it.

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