Worth replacing all windows in my rental or leave them alone?

Question

Hello all - could really use some input on what you best recommend for this semi complicated decision that has been consuming my thoughts for 2 weeks now. My rental was built in 1987 and has the original aluminum windows. There is no damaged glass on any windows but only about 60% of them operate properly (some don't open, some partly open, some very difficult to open). Energy efficiency is zero to none but not as much of a concern to me as tenants pay utilities.

I got a quote from Lowes on a full house vinyl window replacement (12 windows total) plus a sliding door that needs replacement due to broken glass on one pane. However, the focus here is on windows but note that the quote includes the sliding door. The quote is $9450 if paid cash, and $11,820 if financed at 7% over 5 years.

1st question is do I bother to replace the windows on this rental?

2nd question is if I do replace the windows, should I use my current HELOC of $70k to pay the 'cash' price of $9540 (note my current market interest rate on my HELOC is 8.25%), or just finance the $11,820 through Lowes and not tap into my HELOC. I have plans to use my HELOC balance towards future rental property purchases (down payments & rehab costs). The monthly payment through Lowes financing would be roughly $190 / mo for 5 years.

Note that I don't plan on selling this rental anytime soon because my mortgage payment is $960 / mo (bought it at 3.25% interest rate) and it rents for $2000 (4bd, 2bth, 1900 sqft). I bought it way under market hence my $70k HELOC when only owning it for a year and a half now.

Pros of replacing windows (pretty obvious) - no complaints from tenants on window operation (although this hasn't really been an issue so far w/ my current tenants), bonus in ARV when/if decide to sell, and energy efficiency.

Cons - roughly $10k expense, if I use my HELOC then $10k of the balance goes towards a non cash flowing investment (I don't interpret new windows as generating cash flow), if I finance then I add to my DTI which could hurt me when attaining future loans on future rentals.

I tried to keep this as concise as possible while laying out the full scenario. Any advice is greatly appreciated.

Dawn P. · Answer

I'd definitely get another quote or two, I had a contractor replace 12 windows for me and it was right at $5,000. I've never had good luck with Lowe's installation people.

Bill B. · Answer

I don’t know if there’s a worse investment than replacing functional windows, except maybe a pool. If you spent $10k on new windows and sold for an extra $2k I’d say you did better than expected. You might save your renters $100/yr on utilities, maybe. The only reason I would consider replacing any of the windows is if you were vacant and people walking through kept telling you they didn’t apply because of the windows, but has that ever happened?

Matthew Paul · Answer

Find a distributor called Landsing . They are up and down the east coast . Go there and look at windows , and then ask them for different contractors ,Real contractors dont use Lowes or Home Depot for windows

Richard F. · Answer

Aloha,Based on age alone, and depending on environmental exposures, you should examine windows and walls, interior and exterior for any signs of water intrusion. A years long, repeat leak from wind driven rain, extreme UV exposure, failing weatherproofing materials, or blocked drainage weepholes can cause extensive damage and attract termites/carpenter ants that will perform additional demolition. Any odd dark stains under windows, even at floor level, could be a sign; as could deteriorating sheetrock around or under the windows. Water is your #1 Enemy as a LL. Keep a sharp eye out for it's signs.

Todd Jones · Answer

This.Get quotes from other local places. That’s their life so they are well invested in doing it right in some cases.…and yes, replace them especially if you’re going to keep it for a while. They will pay for themselves when you sell it. Once it’s paid for completely, it’s done!

Bill B. · Answer

Do you get those “home mags” in the mail that are 100% homer related ads/coupons, or local home improvement shows? Is there a large windows service like Anderson/renewal in the area? I would assume if you aren’t getting “40-50% off”, you’re paying too much.

Andrew B. · Answer

Absolutely replace them. Imagine you are a tenant and you try to open a stuck window. It doesnt move, so you force it open. Its not your property so you dont care to do it carefully. When the tenant forces the window over and over, eventually it will break. Now you are forced to rush a maintenance item and protect your investment. Hopefully it doesn't happen when its raining, cause now there is water damage. Do yourself a favor, take charge of the maintenance and do it on your schedule. Dont wait for it to break.

Zachary Hryczyk · Answer

Windows are a great investment and not only add equity but energy efficiency to your property long term. You'll get the 10k back eventually and piece of mind that your windows function andvare weather tight. 🙂

Kevin Sobilo · Answer

@Ryan Duphorn, I have a couple thoughts. First in terms of whether this is an upgrade that makes sense I would first look at the typical rental in your market of a similar type and quality. What would they have for windows typically? Then look at what other pluses and minuses your rental has versus the typical. For example in my area a typical C class rental would have aluminum storm windows as you describe. So, if my goal was to be better than the average that MIGHT be one way I would choose to set myself apart, BUT I would also look at other lower cost easier to do upgrades like adding a laundry room and including a washer and dryer. A rental will not exceed the average in every way, so choose the most cost effective ways for yours to exceed the average. Second, that quote is SKY HIGH! I can buy basic replacement windows locally for about $200 each. So, with tax and installation I could have them done for $300-400 which is $3600-4800 plus you were replacing a door. Still the total is nowhere near what you were quoted.Get quotes from other places and look at the quality you're choosing. Maybe you are buying something nicer than makes sense for a rental. Also, when buying at Lowes or Home Depot get their credit card and work through their pro-desk on larger orders. They will give you volume pricing like a contractor and typically get 10-20% off retail on materials.

Colleen F. · Answer

@Ryan Duphorn also don't get a quote from renewal by anderson or any of those 50 year window places it will be expensive. We tried to get 5 condo windows replaced and some we were quoted 1,000 a window for like a 27 x 54 vinyl window ridiculous. It took forever to find a cheaper way to get it done.500/window for install. The sad thing is the PM company didn't even have a recommendation and the condo association pays heat so they should hook up with a supplier/installer. Like you half of our windows were non-functional and you could feel a breeze so it wasn't really a choice to not do them.