Which Upgrades are Worth a Little Extra Money?

[Account Closed]

As I've been thinking about how much to set aside for CapEx/maintenance expenses, I keep coming back to the questions of: "How much should I really be spending on X?"

It isn't a matter of questioning the percentage of gross rent that I should be saving for those expenditures, nor the raw amount - rather, it's about what upgrades, appliances, physical modifications, etc., truly end up being worth throwing down extra money for in the beginning. 

To give a few examples (but definitely not to limit it to these) - is there value in purchasing a $500 dishwasher rather than a $300 one? $100 or $35 for a faucet? Top-of-the-line water heater or a mid-range unit?

To a certain extent, I recognize that this can be a function of the environment of the rental and the market for which you're aiming - obviously a luxury unit will not have a $350 refrigerator. For this though, try to take that out of the equation. In your experience with rentals, what purchases truly show value over time from a higher price tag (longevity, fewer repairs, power in impressing tenants, or something else)?

[Marcia Maynard]

We usually go for durable, easy to clean, easy to maintain. Not the most expensive and the not the cheapest. We value safety and so do tenants, so we will focus first on aspects of safely, then function, then appearance.

Talk to the experts/trades people for their recommendations. We will ask the plumbers, electricians, appliance repairman, locksmiths, painters, landscapers, floor covering installers, etc. what works best and why. What is the best bang for the buck. This has proved most helpful. We do not take kindly to people who recommend something cheap as "good enough for a rental". In fact we don't use the services of people who have the attitude of "It's just a rental." We prefer to promote "This is someone's home and something to take pride in."

We often use mini blinds on windows. In addition, we put decorative curtain rods in the living/dining rooms. We put the basic double curtain rods in the bedrooms (allows both a sheer and a decorative curtain). If you don't provide a curtain rod, it is likely a tenant will install their own and perhaps make a mess of it, using the wrong hardware or drilling it into the wrong place. Some tenants tack blankets over the windows quite unattractively, but  are more likely to use a curtain when the curtain rods are there. Over time, I notice the decorative curtain rods, which can be 10 times more expensive, cost less in the long run because they hold up well.

One of the things tenants touch most often are door knobs. It is worth putting in quality door hardware. We use Schlage or Kwikset brands. We asked our local locksmith for their recommendation. They told us, for exterior door hardware get the silver color finish as it holds up better to weather. Our standard now is Satin Nickel.

Also, take some time while selecting any product to see it from a health and safety perspective. Pay special attention to smoke detectors and carbon monoxide detectors and their placement. We now install the ones that have 10 year lithium batteries. The test button and hush button on Kidde products seem to work better than First Alert, so we switched to that brand. Ask a fire fighter or fire marshal what they recommend.