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Updated 7 days ago on . Most recent reply

How much do you spend to improve a property?
I Just got a lease signed on my first rental property. I am a bit obsessive, and may be guilty of spending too many resources improving the property. I wanted everything perfect.
Others told me I was over improving. I was mostly basing my decision on the information in Property Management Kit For Dummies and Building Wealth One House At A Time.
These 2 books both endorse a philosophy of "make the place really nice to attract the best tennant".
In my minute experience, I spent a ton of work improving the property and a passerby out of the blue inquired as to whether the house would be for rent soon.
This individual thought the house would be perfect for his family and was excited by the opportunity.
He was qualified, signed the lease and moved in, allowing me to turn the property in 7 calander days!
So, in my singular experience, "over inproving" the property prevented even needing to advertise and show the propert to applicants. This probably saved me 1/2-1 full month of vacancy. The savings from having the property turn quickly far outweigh the extra resources used. I don't expect this to happen every time however!
It is hard for me to understand where to stop when fixing up a place.
What are everybody's thoughts and experiences on this?
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Most Popular Reply

- Property Manager
- Royal Oak, MI
- 6,322
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@Andrew Chase write this down and don't EVER forget it:
Maintain to the Neighborhood!
What does that mean?
Everything is relative to the location.
- What's expected in one area may or may not be expected in another.
Swimming pools are almost a necessity in Class A properties in Phoenix, but what about in Class D properties there? Or Class A properties in Montanta?
MANY newbies make the mistake of prepping their rentals like they're going to live in them - instead of "Maintaining to the Neighborhood".
One of two things will happen if you don't follow this guideline:
Over-Improvement: yes, you often get a tenant faster, but there is a limit to how much you can spend on improvements and get enough higher rental income to get a return on your investment (ROI).
- At a bare minimum, you want higher rents to cover your funds spent BEFORE you have to spend more money fixing those exact same things again.
Under-Improvement: you risk becoming a slumlord and only attracting slumtenants:(
- You don't want to do this on Class A and B properties.
- You have to walk a fine line with Class C and D properties.
Easiest way to monitor or learn how to Maintain to the Neighborhood your property is in - check out interior pics of the rental competition on Zillow.
FYI: in our experience you can usually justify 5-10% over-improvements with less vacancy time and corresponding lost rents. Beyond that, you really have to analyze your ROI over the expected timeline to recover the funds spent via the higher rents.
- Drew Sygit
- [email protected]
- 248-209-6824
