Prioritizing upgrades and execution strategies

[Allison O.]

I purchased a small house last fall. I could see myself living there for a few more years, but things could change and I could also need a bigger space. Either way, I would keep the property as a rental. I am also working towards getting my first rental property next year. 

My current home definitely needs exterior updates for curb appeal. Sherwin Williams did a free exterior paint consult which was great, but now I run into execution. I got a few quotes from $1500-over 2k to detail paint the windows, gutters, siding above my porch, the railing, and shutters. And if I do this myself, it would be tedious and not guaranteed to look great. The windows, doors, gutters, shutters, and porch railing could all stand to be replaced. If I hire a local contractor that would be affordable, they will expect me to know exactly what I want (I have an idea but need guidance). If I go to a design and build, they will have the vision I lack but be much more expensive. I don't want to pour money into this place if the ROI doesn't make sense. Another option is to do one replacement at a time, but I want a cohesive end result and doesn't want to stretch this out for years.

So, what would you spend money on and prioritize? Are the new things I listed above worth it? Or should I just take a chance and paint everything and see what happens? Picture of the house is attached for reference; the first picture is what is currently is and the second is a rough rendering of what Sherwin Williams suggested I do.

Thanks!

[Allison O.]

@John Warren@Jaron Walling Thank you both for your input! I agree, overall it is not bad. My boyfriend has a similar stance to you guys; it's fine the way it is. I just feel like it looks a bit run down and could use some curb appeal. 

I am trying to figure out my strategy; background is that I originally wanted a multi family (this is before I discovered Bigger Pockets). The realtor I worked with talked me out of it. Overall, I am happy with my house and it is in a great area. I want to start buying rental properties but am discovering I need a lot of cash upfront. My greatest advantage is that I can use a VA loan, which means I would save a ton of cash, but also means I would have to move. Hence, this house could potentially become a rental property. Personally, I would love to stay for a couple years and giving it a facelift would bring me joy but I also know I can easily go overboard here. Additionally, the basement is unfinished. If I choose to focus on that, I could add a bedroom and half bath (currently have a 2 bed, 1 bath) and my rental income potential goes up quite a bit. Without doing that, cash flow from renting may be minimal or I would be breaking even. Additionally, I would be paying money for the basement and not get to enjoy it myself.

So, at this point, I could see it as a partial flip, but wouldn't mind staying. My head is spinning a bit!

[John Warren]

@Allison O. the home looks pretty nice from the photo here. Maybe you can wait to do these cosmetic upgrades until you get ready to rent or sell the home in the future. I would not personally paint gutters as it is nearly the same price to replace them. For the shutters I could go either way, but the hand railing and windows you can find someone local to paint them relatively inexpensively. 

I would not do much with the Sherwin William idea unless you personally want to change the look or you want to sell. Your home looks nice! Do a few cheap decorations and throw down some mulch. Done!

[Jaron Walling]

@Allison O. I'd step back 10,000ft, take a deep breath, and slow down. I agree with @John Warren there's nothing wrong with this property. Maybe it's the way your post reads but considering what we look at that property is mint. What's your strategy? Maybe it's a flip opportunity for you. 

Unless the interior is outdated/trashed what's the play? As a rental I'd touch nothing on the exterior. Nothing you described generates additional rental income, ROI. As a rental I'd only repair/replace/update the kitchen, baths, and breakable items in the house. Over renovating property is a beginner mistake. The hard work and dollars spent can get trashed by tenants and general wear and tear. Treat it as a future rental or just flip it and move on.

[Allison O.]

@John Warren@Jaron Walling Thank you both for your input! I agree, overall it is not bad. My boyfriend has a similar stance to you guys; it's fine the way it is. I just feel like it looks a bit run down and could use some curb appeal. 

I am trying to figure out my strategy; background is that I originally wanted a multi family (this is before I discovered Bigger Pockets). The realtor I worked with talked me out of it. Overall, I am happy with my house and it is in a great area. I want to start buying rental properties but am discovering I need a lot of cash upfront. My greatest advantage is that I can use a VA loan, which means I would save a ton of cash, but also means I would have to move. Hence, this house could potentially become a rental property. Personally, I would love to stay for a couple years and giving it a facelift would bring me joy but I also know I can easily go overboard here. Additionally, the basement is unfinished. If I choose to focus on that, I could add a bedroom and half bath (currently have a 2 bed, 1 bath) and my rental income potential goes up quite a bit. Without doing that, cash flow from renting may be minimal or I would be breaking even. Additionally, I would be paying money for the basement and not get to enjoy it myself.

So, at this point, I could see it as a partial flip, but wouldn't mind staying. My head is spinning a bit!

[Drew Sygit]

@Allison Ottenfeld to many times owners try to make a rental into something THEY would live in.

Most investors will lose money with this approach!

Remember, MAINTAIN TO THE NEIGHBORHOOD:)

Maintain too little and you risk being a slumlord.

Maintain too much and you lose money.

[John Warren]

@Allison O. I am sorry a realtor steered you away from multifamily. Most realtors know almost nothing about investing, and they know only how to help folks buy and sell single family homes. Many realtors have also done a bad job investing themselves and have been burned. 

Your VA loan is a powerful tool indeed. There are other ways to get access to capital which you can read about here on BP, or you can get this info for free from podcasts and books. If you bought this home well, you can often times refinance or do a HELOC in a year or two to take advantage of your equity. You can also borrow against a 401k. There are so many ways to grow in the real estate business.

As for your current house, as a rental property it needs literally nothing done to the exterior. You would have plenty of renters! Save that money for your next investment.