Renovating a Townhouse: Builder's Grade?

[Stephen E.]

We are looking at buying a bank sale property. Here in Canada they don't sell at the amazing discounts you see in the US but you can potentially get something for $10k less than market on a $133k basic townhouse, which is what we are looking at. Kitchen cabinets, counters and sink need to be replaced in this unit as does the bath tub and vanity. I estimate the total cost of renovations as $12,000.

I have a disagreement with my wife on the level of investment required in the kitchen. She is in favour of basic, builders grade cabinets that I believe we can get for $2,000 or so plus installation. Home Depot have higher grade in stock cabinets that run about 2.5x to 3x this price and I built this into my $12k total estimate of renovations above. My thinking was that putting a higher quality cabinet in would look better and would save labour on replacing the builders grade stuff early when it reached the end of its shorter useful life. My wife thinks the up front cash savings are worth putting in builders grade, and doing whatever we have to later when rents are higher and we have more money. There is the question of whether renters would pay more for a place with better cabinets or would not. Although you might not think the average renter could pick out which cabinets are builders grade and which are better, I think these kinds of things add cumulatively and give the overall impression of the place.

So the quick question is this: builders grade cabinets for a rental unit kitchen, or something above? It is a townhouse, it is in a reasonable area near a hospital, which is a major employer, but it is more of a working area than a ritzy area. What would you do: put in builders grade cabinets or something better? Thanks in advance.