Advice for upgrades

[Kyle Keller]

I have a home under contract, I'm looking at all of the upgrades required, roof, HVAC, and fixing wood rot are among those, otherwise the main things are cosmetic. Though, I don't think the cosmetic things will raise rent that much. I would need to redo flooring throughout and paint the interior and exterior, install new vanities, lights, new kitchen, the list goes on. I'm curious what people would recommend doing. Right now, I'm thinking about doing the basics: roof, HVAC, and things required to make the place safely livable, but not much more. I don't believe doing much more will equate to a great increase in rental income.

[Anna Laud]

@Kyle Keller

Hi Kyle! 

I would say that usually easy on the eyes upgrades overall tend to boost renter satisfaction and can allow for higher rent rates to be charged in a lot of cases. 

While making it livable is obviously necessary, maybe a few things that could be added to keep appeal in mind- basically putting you in line with area comps/level of finish.

Good news is that there are a few updates that can be pretty inexpensive like paint and carpet- although carpet isn't usually a go to in recommendation for a rental , but I realize that laminate is more costly. 

I think I would go into it with a plan that would keep me in line with what comps in the area are like and in my logic, use the tax deduction standpoint as the offset for expenses. 

One risk that I could see running into in some areas would be renter quality if you've got the lowest end house in the area. It seems like it might be best to find that middle 'sweet spot' and go with the median level of finish then in your case (sounds like not wanting to invest a lot to update, and want to keep cash flow at max.)

If I were to run comps and see on the high end of area rentals it meant all new countertops, appliances (high end), hard wood/laminate, kitchen cabinets etc and on the low end it meant more of an 'apartment level' finish - I personally would go for the middle road to this and maybe choose to refinish countertops, refinish kitchen cabinets and go strictly mid-range on appliances (I would pick up the extend warranties personally).

In hitting the kitchen and baths, getting some fresh paint up and addressing flooring- I would know the heavy 'where the eyes are drawn to' items were checked off my list, take it all for expenses come tax time and be pretty happy to know I was right in the middle zone for the area- I wouldn't have the lowest quality of renter pool in the area, or be worried about overpricing myself out of the competition on the high end in my mind. 

Basically, getting the most stretch from my dollar to move into the 'safe zone'- I'll include a few links on refinishing some basics that are cheaper that replacing if you can do yourself. 

Hope that helps = )

 https://www.thisoldhouse.com/p...

https://www.diynetwork.com/how...