Be Cautious About Overspending on Rehabs
When doing rehabs on fixer upper properties, be careful to avoid overspending. Spending too much time and money on the rehab takes its toll on your budget as well as over factors. These are some of the dangers:
No Budget Left For Critical Issues
When you’re too loose with your money on cosmetic “niceties” you run the risk of being caught short if you run into surprise critical issues later on in the project. For instance, you order Italian mosaic backsplash tiles and other high end features for the kitchen, then discover later on that you’ve accidentally purchased a home built with the dreaded Chinese drywall, and the entire house is going to have to be brought down to the studs. Now you’re faced with a huge outlay that you weren’t expecting, and your budget’s already been stretched as it is.
More Time Needed For Custom Deliveries
If you’ve ordered custom products or specialized materials that need to be delivered from third parties or overseas, this could hold up your rehab timeline. Ultimately, while you’re waiting for materials it will take you longer to finish the rehab and, subsequently, longer to get the property cash flowing for you.
Complicated and Expensive Repairs and Replacements
When you have beautiful materials and maybe even custom work in the rental, every repair becomes more complicated. An Italian ceramic tile cracked on the floor in the entryway. Are you going to be able to find a new piece of matching tile to replace the broken one? The exquisite bamboo flooring in front of the kitchen sink became victim to the leak around the faulty garbage disposal flange. Will you have trouble getting replacement planks that match? Replacements also become more expensive when you have all high end appliances in the rental. You can’t exactly replace a stainless steel French door refrigerator with a cheap plastic model reminiscent of your grandmother’s kitchen.
Tenants May Not Take Proper Care
Many high end home items require special maintenance products and techniques. Some tenants may not know – or care – about how to take care of finer things. Stainless steel appliances, for example, should be cleaned with certain types of cloths and products. All it takes to mar the finish forever is one tenant using a green scratch pad and some Ajax on the front of the stove. Or scrubbing away at burned on food debris on the glass cooktop. Other tenants may eagerly vacuum the hardwood floors, forgetting to change the setting to turn off the brush action. You simply can’t trust that tenants are going to take excellent care of the high end finishes in your fixer upper rental property.
Your goal, of course, is to make the property look as beautiful as you can so you can charge higher rents and attract the best possible tenants. And you should want to offer safe, attractive rentals. But there’s a fine line between providing a quality, beautiful rental property and going overboard on high end finishes. Just be cautious about overspending on the “fun” stuff and keep in mind the future ramifications of all your rehab choices.