@Nathan Patterson
I have one house where I supplied appliances six years ago when I got back into rentals in earnest. I've since had to do a service call for the fridge and had to replace the oven recently as the repair was going to be about as much as a newish used one that was in great shape. I've also had to deal with a couple of appliance issues in a duplex I have where I do supply appliances. I think about taking these few issues and multiplying them out times ten (that's today, and hopefully in the future 20X or 30X) and it just makes me depressed thinking about it.
After that first one, I decided that I wasn't going to supply appliances and everyone thought I was crazy, especially when I did the same in the houses rented out section 8. I advertise the houses that way, even if there's an appliance or two that the previous owner has left in them and I don't mention them so that the people coming aren't (or shouldn't be) expecting to find them. I have a note in the lease that they're not supplied or warranted by the landlord and the extent of what I will do (if any exist at all) is haul them away. The exception to this is a built-in micrwave, of course I'll manage those.
As for lease up, yes, I'm sure this makes renting the house more of a hurdle for folks but I'm pretty sure that I think differently about this than many of the local landlords that I know. I'm really all about adding hurdles, ha! I'm absolutely not interested in leasing fast at all and I'm extremely picky about tenants and I do things like require a large security deposit (even for section 8 renters, I have three of them and love them), don't supply appliances, take my time doing background checks and arranging multiple calls/meetings with potential tenants. I always do current home inspections to see how they live today and if I can't (e.g. they're moving in from out of town) I'm probably not going to rent to them. I'm looking for tenants that are professional, stable and can act like a thoughtful, organized person regardless of their economic status. Across ten doors I've had three turnovers in five years and one of the ladies that moved out (she wanted a larger house) still calls me occasionally to see if I have something available again. She apparently moved into slumlord territory to get a much larger house. The longest one took 9 weeks to fill and the other two took four weeks. When the houses were just acquired it usually took me two to four weeks to get a tenant in them though I had some that were rented prior to make-ready and renovations being done, that's happened a couple of times.
Just for reference, these are not high-end properties. They're working class or in lower income areas. I'm typically all in after fix-up/renovation at 45K to 85K and they rent from between $850 a month to $1050 a month. $900 seems to be the sweet spot right now and most of those cost 45-55K including fix-up.
With all that said, I'm positive I spend money on the properties in ways that most landlords at these price points do not. In fact, I think I spend money in places where many landlords with more expensive properties don't as well. I make sure they're well insulated, have replacement windows, spend more on nice flooring that looks great (plank style / wood-look porcelain tile, hardwood or click-together LVT planks, not peel-and-stick squares). I'm a fan of gated yards and higher-end security doors and will install chain link and even some wood privacy fencing if I think the house/area warrants it. The units all have tri-paint jobs with ceiling paint, a nice wall color and super-white glossy trim on everything else. I do whole house HVAC systems, not window unit ACs. I HATE plastic shower stalls and put in steel tubs with tiled surrounds. I also install hardwired alarm systems because I've always used them and I appreciate them. Most of the tenants appreciate and use them too, so that makes me happy.
Would this work at $1,800+ rents? I went to a learn-on-the-site program that our local REIA had recently. 3BR/3BA house, owner is probably in 145K after fix up (I know the purchase price, don't know what was spent to get it ready after purchase) and a handful of years later it's now worth 190K. Rents for $1,800+ a month, depending on how long tenant will commit. The bathrooms made me so depressed... plastic shower units with sad apartment class vanities with some sort of beige solid surface tops. The kitchen counter laminate was also very dated looking. A big set of nice stainless steel appliances though! To me, it looked like someone was living in a large 3BR apartment and not a nice 3BR house. If it was mine, I'd fix those bathrooms up with real tubs and tile and different vanity tops and change out the kitchen laminate with something modern and I definitely wouldn't supply appliances.
Would it work... I don't know. Maybe I'll get the chance to try someday. I'm positive though that in this business there is no single right way to do things. I think everyone has to find their own way to some degree. What type of tenant can you deal with, what type of neighborhood, SF or MF, etc. etc.
Good luck!
Best,
- Chuck
